Examining the effectiveness of policies for developing battery swapping service industry

Abstract

The transition to electric vehicles such as electric motorcycles is being encouraged by the government worldwide to improve energy saving and reduce greenhouse gas emissions. Nonetheless, several technical challenges – price, range and charging time – have​ hindered electric motorcycle adoption. Battery swapping is an alternative to overcome such challenges, allowing users to conveniently change their depleted battery for a fully charged battery at a designated charging station. Notwithstanding the advantages of battery swapping, the battery swapping service industry faces some issues that can make it less profitable—battery standardisation, infrastructure readiness and investment cost. This study explores approaches toward a profitable battery swapping service industry, focusing on examining the effectiveness of policies for developing the battery swapping service industry in the case of Indonesia. To this end, this study combines the policy analysis framework with the system dynamics modelling to analyse the dynamic complexity of the battery swapping service industry. This study reveals that price and infrastructure instruments are crucial in boosting battery swapping adoption, thus making the battery swapping service industry profitable. The subsidy on the battery swapping stations appears as the most effective policy for developing a profitable battery swapping service industry compared to the battery pack standardisation and electricity subsidy policies.