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Fire-safety norms for Li-ion battery could push up e-scooter prices by 10%

The government ordered additional safety requirements for lithium-ion batteries through a notice on September 1st, to come into effect on October 1st

Electric scooter prices could rise more than 10 percent due to additional fire safety standards, just as their sales saw a significant increase in August.

The government ordered additional safety requirements for lithium-ion batteries through a notice on September 1st, to come into effect on October 1st.

These relate to battery management systems, on-board chargers, battery pack designs, heat propagation from internal cell short circuits that can lead to a fire, etc.

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They apply to two-wheelers, three-wheelers, and cars (experts say cars have advanced batteries, leaving most of them untouched).

The new standards are based on the recommendations of a panel of experts set up by the Department of Roads and Motorways in the wake of a series of electric scooter fire incidents across the country.

While the prices of batteries and electric scooters could rise, consumers who had put off plans to buy such scooters could reconsider their plans.

Lithium-ion batteries are either assembled in-house in the country by original equipment manufacturers (OEMs) such as Ola Electric and Ather Energy, or sourced from third-party suppliers who import the cells.

Samrath Kochar, Founder and Chief Executive Officer (CEO) of Trontek, which assembles and sells lithium-ion batteries to the country’s leading electric scooter manufacturers, said: “The new regulations will result in a battery cost increase of 20 percent, say us, a Rs 1 lakh scooter, because new equipment needs to be bought and new tests done. And since a battery accounts for half the cost of a vehicle, the additional cost would be Rs 10,000. But the changes are in the interest of end users because they will provide more security. Only companies with good R&D and testing standards will be able to qualify and pass.”

Kochar said that for electric scooters cheaper than Rs 1 lakh, the percentage price increase would be higher as the cost of testing would be the same as a premium scooter.

However, he said that as the dollar strengthened, manufacturers had little leeway to absorb the cost hike.

A leading manufacturer of electric scooters said the new standards are key to vehicle safety.

But there are problem areas.

“As we read the safety standards, there are some difficult areas to consider. How do we ensure that each cell is imprinted with a manufacturing date? That looks difficult,” said an executive at an electric scooter company.

The other difficult area, say lithium-ion battery makers, is the October 1 deadline.

Hero Electric CEO Sohinder Gill said: “It is a well thought out policy. Industry and politics must now agree on an implementation framework in the short and medium term. Some key points will require months of development and testing before mass production can begin.”

There is a consensus that this will allay growing safety concerns about electric vehicles.

Anant Nahata, managing director of Exicom, which makes batteries, said, “The move will boost consumer confidence.”

The new safety standards for lithium ion batteries

  1. New mandatory requirements are related to battery management system, on-board charger, design of the battery pack, thermal propogation due to internal cell short circuit which could lead to a fire, among others
  2. Battery prices are expected to go up by around Rs 10,000
  3. Battery makers say that they will have to pass on the cost to OEMs, but it is a small price to pay for additional safety
  4. Requirement to have data of manufacture on each cell says OEMs difficult to implement
  5. OEMs say the deadline for implementing the news standards from October 1st is too stiff. Need discussions with policy makers for a staggered implementation

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