Electric cars are gaining ground in India. All the same, a key factor that still keeps many buyers on the fence is the ‘Battery.’ Not only are batteries expensive, making electric cars comparatively more expensive than ICE cars, but they also degrade over time. Moreover, the thought of replacing a battery and bearing its cost is worrisome to many. This is where Battery as a Service steps in. Instead of buying the battery, just pay to use it. As simple as it sounds, it has turned out to be a radical development in the electric car industry and changed the way people look at electric cars.
What is Battery as a Service?
Battery-as-a-Service is a battery rental model, wherein the battery is separated from the electric vehicle’s cost. You can buy an electric vehicle without buying its battery and pay to use its battery as much as you need to. In simpler words, you can use the EV’s battery on a rental or subscription basis, and while the original owner of the battery is the service provider, who not only provides the battery as a subscription, but also ensures proper maintenance of the battery and replacement if needed. Analogically, it is similar to buying a phone and paying separately for the network services.
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How Does BaaS Work?
The BaaS process is straightforward. You buy an electric car at a lower cost, as the battery cost is removed from the total price. Then you select the battery subscription plan according to your needs.
Depending on the service provider or car manufacturer, this can be done in two ways.
Battery Subscription
In the battery subscription model, you pay a monthly fee to use the battery. Essentially, you pay for the number of kilometres you plan to drive in a month. However, in most subscription models, you have to pay for a set minimum number of kilometres, for example, 1,500 km per month.
For instance, with the BaaS scheme, the price of the MG Comet EV starts from Rs. 4.99 lakh + 3.2 per km. So, the upfront ex-showroom cost of the Comet without the battery is Rs. 4.99 lakh, and for battery subscription, you may have to pay at least Rs. 3.2 X 1,500 = Rs. 4,800 monthly, depending on the finance partner of the car brand.
Battery Swapping Model
With the battery swapping model, instead of charging your electric car’s battery, you swap it with a fully charged battery at a swapping station. The battery swapping model has not come to passenger electric cars yet, and it is mostly used in commercial fleets, delivery startups, gig workers.
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Why is BaaS becoming Popular?
The key reason BaaS is becoming popular is affordability. As mentioned before, batteries are expensive, and an electric car’s battery constitutes a large portion of its price. Once the battery’s cost is removed from the EV’s cost, the vehicle becomes significantly more affordable.
All the same, affordability is only one of the BaaS benefits.
Advantages of Battery as a Service
Low upfront cost
Because you do not buy the battery of the electric car, the ex-showroom price of the car drops considerably. This attracts first-time budget-conscious electric car buyers.
For example, the price of the MG Comet EV with the BaaS scheme starts from Rs. 4.99 lakh + Rs. 3.2/km, while its starting price, including the battery cost, is Rs. 7.50 lakh.
Free of battery replacement worries
No matter how advanced the battery is, its health declines over time. With BaaS, you do not need to worry about replacing the battery, as battery replacement and servicing are usually part of the BaaS package provided by the service provider.
Option to upgrade
As battery technology advances with time, subscribers may get the option to access fresher and more economical battery packs, without having to worry about buying a new vehicle altogether.
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Buyback offers
Some electric car manufacturers offer buyback schemes with their cars after a certain duration. With BaaS, you can pay a lower upfront cost, use the car for a few years, and get a good value for it from the brand by selling it back to them.
Profitable for businesses
The Battery as a Service can be a boon to commercial fleet operators, delivery riders, and taxi operators, as they have a predictable monthly running cost, which can be optimised with BaaS.
Limitations of Battery as a Service
Users with long driving requirements can be at a loss rather than a profit
For those who drive their cars more than 15,000 km per year, the cost of subscribing to the battery can surpass the cost of buying the battery. For example, for an MG Comet EV, which has a starting cost of Rs. 4.99 lakh + Rs. 3.2 per km, you will be paying more than Rs. 48,000 per year for the subscription to the battery if you drive over 15,000 km in a year. Whereas, with a battery, the Comet has a starting cost of Rs 7.50 lakh. So, if you use it for more than 5 years, you would be at a loss with a BaaS scheme compared to buying a car without the BaaS scheme.
Minimum monthly payment
As mentioned before, more often than not, BaaS comes with a minimum monthly cost; you have to pay for a minimum number of kilometres, whether you drive the car that many kilometres or not.
Resale issues
The process of reselling an electric car with a BaaS scheme can get complex, as the new buyer either has to take a lease agreement or buy the battery separately.
Reliance on a finance partner
The terms and conditions of renting the battery are dependent on the finance company’s policies. This limits the car owner’s control.
Cars with Battery as a Service in India
In India, the concept of Battery as a Service is relatively new. However, many electric car manufacturers have begun selling cars with BaaS. Here is a list of cars with BaaS in India.
| Electric car | With the BaaS price | Without the BaaS price |
| MG Comet EV | Rs. 4.99 – 7.36 lakh + Rs. 3.2/km | Rs. 7.50 – 9.56 lakh |
| Tata Punch EV | Rs. 6.49 lakh + Rs. 2.6/km | Rs. 9.69 lakh |
| MG Windsor EV | Rs. 9.99 – 13.60 lakh + Rs. 3.9 – 4.5/km | Rs. 14.10 – 18.60 lakh |
| Maruti Suzuki e Vitara | Rs. 10.99 – 14.51 lakh + Rs. 3.99 – 4.39/km | Rs. 15.99 – 20.01 lakh |
| Kia Carens Clavis EV | Rs. 12.84 – 15.94 lakh + Rs. 3.3/km | Rs. 17.99 – 21.99 lakh |
| MG ZS EV | Rs. 13 – 15.51 lakh + Rs. 4.5/km | Rs. 17.99 – 20.75 lakh |
The Future of Battery as a Service
As electric cars penetrate deeper into the mass market space, BaaS could become a key component in the electric car ecosystem. A few years down the line, with better technology and wider electric car service networks, the BaaS model can be made even more practical. Moreover, for developing markets like the Indian market, where the upfront price of an electric car is a major hindrance in EV adoption, the BaaS model could be a groundbreaking solution.
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Summary
Battery as a Service has been a revolutionary development in the electric car space, as it resolves two major concerns with electric car ownership – battery cost and battery ownership risk. All the same, like every technological development, BaaS comes with its own set of advantages and disadvantages. While BaaS can be a smart solution for most electric car buyers, for many, traditional ownership still makes more sense. All the same, one thing is certain: the future of electric mobility is not only bright, but also diverse.
FAQs related to BaaS
What is Battery as a Service or BaaS?
Battery-as-a-Service is a battery rental model, wherein the battery is separated from the electric vehicle’s cost. You can buy an electric vehicle without buying its battery and pay to use its battery as much as you need to. In simpler words, you can use the EV’s battery on a rental or subscription basis, and while the original owner of the battery is the service provider, who not only provides the battery as a subscription, but also ensures proper maintenance of the battery and replacement if needed.
Which cars in India come with BaaS?
In the Indian market, cars with the BaaS scheme are the MG Comet EV, Tata Punch EV, MG Windsor EV, Maruti Suzuki e-Vitara, Kia Carens Clavis EV, and MG ZS EV.
Which is the most affordable car in India with BaaS?
The most affordable car in India with the BaaS scheme is the MG Comet EV. With BaaS, the starting cost is Rs. 4.99 lakh + Rs. 3.2/ km.
In BaaS, do I have to pay for kilometres, or is there a monthly rent of battery?
With BaaS, you have to pay a monthly fee to use the battery. Essentially, you pay for the number of kilometres you plan to drive in a month. However, in most subscription models, you have to pay for a set minimum number of kilometres, for example, 1,500 km per month.
