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Electric vehicles are often seen as a practical path toward cleaner transportation. Over the years, technology has improved significantly, and many of the earlier concerns about performance, range, and reliability have been addressed. However, one challenge continues to stand in the way of large-scale adoption: affordability.
In this episode of the Analytics Insight Podcast, the conversation turns to how new financing ideas are beginning to change that reality. Ashwin Shankar, founder of BatteryPool, shares how the Battery-as-a-Service (BaaS) model is helping make electric vehicles more accessible by separating battery costs from the vehicle itself.
Ans: BatteryPool is a deep-tech fintech platform that helps make electric vehicles more affordable by making batteries more affordable. As most of you know, the main cost involved in an electric vehicle is the battery pack. We're taking inspiration from how affordability was addressed in other segments in the past, such as prepaid cell phone cards. We take lessons from there and bring them into batteries.
What we offer is a sachetized or pay-as-you-go model for electric vehicle batteries, allowing drivers to pay for battery packs based on their cash flow. You know, they can pay for the battery packs daily, weekly, or buy prepaid cards for phones, in the same way you can pay for your EV battery packs.
Ans: In an electric vehicle, a battery is about 50% of the cost of the vehicle. So the vehicle is literally just a motor and a battery pack. The battery pack is about fifty percent of that value. Now, while these battery packs are like a large chunk of the electric vehicle value, they also tend to degrade. So the vehicle and the motor don't really have a, you know, short life. They don't degrade very quickly. The battery packs tend to degrade. That's where financing of the batteries and Battery as a Service type of models come into the picture.
Remember, India's, especially the two and three-wheeler segments, are cash flow-constrained. Most customers are cash flow constrained, so they're not able to buy the electric vehicle or buy the battery upfront with cash available. Which is why if you're able to break that payment out into daily plans, weekly plans, or monthly plans, something that aligns better with their cash flows, it can help drive adoption of these electric vehicles and their battery packs.
Ans: You know how I mentioned the batteries degrade, batteries have a limited life, and customers are essentially renting that battery pack. They expect the battery as a service provider to replace the battery once it degrades. So once the battery degrades, it doesn't degrade down to zero. It may not be a, a right fit for an electric vehicle use case, but it still has about sixty, seventy percent of its health left, which makes it a perfect product for energy storage applications.
Ans: What we've seen is that this kind of model works really well. I mentioned two and three-wheeler drivers, but more so in the commercial vehicle segment. Basically, drivers who are using these two-wheelers and three-wheelers for fleet and commercial vehicle applications. Essentially, your last-mile delivery workers, your e-rickshaw drivers. These are drivers who are not served in the form of formal credit.
So people like you and me might be able to access formal credit to buy the vehicle and battery, but this segment doesn't get access to formal credit. To answer your question, you know, we see a fantastic product market fit in the segment of last-mile delivery vehicles, the segment of e-rickshaw drivers, where they don't have access to formal credit, and we are in some ways giving them that credit in the form of these batteries.
Ans: In this battery as a service, you know, the maths behind it, the CapEx of the battery is what we are amortizing or what we are renting out over its life. So to be able to reduce the CapEx of the battery pack, the battery as a service, the fee that we have to charge will also automatically reduce. So this helps; these exemptions help in reducing the cost of the battery pack by about ten to twelve percent, and that can help reduce the battery as a service fee that we are charging to our customers.
To know more listen to the full podcast.
