The year 2012 has often been referred to as the beginning of India’s modern electric vehicle revolution when e-rickshaws started popping up in the northern states. However, adoption was slow given the huge downtime. E-rickshaw drivers had to wait around 8-10 hours for the batteries to charge—not a lucrative option when drivers’ earnings depend on how quickly they can get their vehicle running.
In 2020, as EV adoption gained momentum, IIT Kanpur graduates and BatterySmart co-founders Pulkit Khurana and Siddharth Sikka travelled across their home state of Uttar Pradesh, which is also the largest market for e-rickshaws today, and the duo spoke to drivers to understand their problems.
For the first ten years since EVs started flooding into the Indian market, every e-rickshaw sold was lead-acid based, recalls co-founder Khurana in a conversation with YourStory Founder and CEO Shradha Sharma. “We could hardly find lithium-ion-based e-rickshaws then. That is changing now, but it gave us the core insight that it takes 12 hours to charge that battery.”
They realised that drivers were borrowing money every 6-8 months to replace lead-acid batteries. On the other hand, Li-ion batteries come with a huge price tag, accounting for about 30% of the vehicle cost.
India does not manufacture any Li-ion cells and relies on countries like China and South Korea for the supply. Today, China controls 75-80% of the world’s cell supply, the co-founders say, leading to a high capital expenditure in EV manufacturing.
Battery Smart’s battery swapping services eliminate the need to own an EV battery, reducing the upfront cost of owning an electric vehicle. However, the founders also realised the need to simultaneously tackle the problem of charging infrastructure.
While vehicles used for personal commutes can be charged at home, the majority of EV owners today are commercial drivers, working for fleet operators to deliver packages, groceries, and couriers. This places a strong demand for robust public charging infrastructure in India. “Compared to the world, the number of chargers available per car is five times lower than what it should be in India,” co-founder Sikka notes.
Battery Smart also facilitates charging at its network of over 1,500 battery-swapping stations for the use of delivery partners. Today, the company operates a battery swapping station in every square kilometre in Delhi. In some pockets of the city, the company operates a station every 100 meters. It currently has about 2 lakh batteries in its network and deploys around 10,000 to 15,000 batteries every month.
The startup has managed to check all the right boxes while tackling a complex problem—build stations at the right places, optimise vehicle utilisation, minimise wait time, and give customers the best experience in battery swapping. “On the surface, it looks like a very, very simple network; you go there, you swap in two minutes, you’re out of it. But on the backend, it’s actually very complex. There’s a lot of data, technology, engineering processes, and playbooks making it work,” the co-founders say.
But the duo admits that the company still hasn’t completely cracked the model. “I won’t say we are there yet. There’s a lot to be solved, and there are hardly any examples where we can learn from because no one else was doing it like a partner-led model,” Khurana adds.
Battery Smart partners with local entrepreneurs to open stations for the company, whereby the startup provides the technology, batteries, and training, and the franchisees handle the operational complexity on the front end.
Currently, the company has about 1,500 entrepreneur partners and operates on a revenue-sharing model, whereby each entrepreneur invests in the network through a security deposit, a franchisee fee, and an initial investment of about Rs 2.5-3 lakh. “In terms of ROI, we see a typical station getting profitable in terms of recovering its capital in 8-10 months. So it’s a three-year contract. In 10 months, they recover the capital and they’re making about Rs 50,000 a month,” the co-founders add.
The startup’s model is different from other swapping operators that usually set up and manage swapping stations on their own. “Our DNA is closer to running an operational excellence-focused team to run a large network and not in manufacturing the product,” Sikka clarifies.
Edited by Kanishk Singh
