While EVs are often seen as the future of mobility, several barriers have hindered its widespread adoption. Although factors like range anxiety and resale value have contributed to hesitations, the primary obstacle to EV adoption is widely considered to be the higher acquisition cost. To tackle this, JSW MG Motor India has come up with battery as a service (BaaS). The programme was first rolled out with the Windsor EV and was then gradually trickled down to the Comet EV and the ZS EV.

Speaking to HT Auto, Gaurav Gupta, Chief Growth Officer, JSW MG Motor India, highlighted that through initiatives like the MG eHUB, a lifetime battery warranty, and a 60 per cent buyback program, the company is addressing key challenges for EV customers, including charging infrastructure, battery security, and improved resale value.

He further added that now with the BaaS JSW MG Motor India is aiming to address another key hindrance in EV adoption, higher acquisition costs. Terming BaaS as one of the most disruptive moves to accelerate EV adoption in India, Gupta stated that the programme offers a clear price advantage, which will shift consumer perception and encourage more buyers to switch to EVs.

How does BaaS work?

The Battery-as-a-Service (BaaS) program is designed to reduce the upfront acquisition cost of electric vehicles (EVs) by offering a flexible, subscription-based model for the battery. Traditionally, when purchasing an EV, the cost includes both the vehicle and the battery, along with taxes and registration fees. With MG Windsor EV, buyers now have the option to pay ₹9.99 lakh for the base model of the vehicle, excluding the battery, and an additional charge of ₹3.50 per kilometre driven for the battery. This is a significant shift from the conventional purchase model where the EV, including the battery, is priced at ₹13.49 lakh ex-showroom.

Under the BaaS model, the buyer pays for the vehicle minus the battery pack, which comes under a customised pay-per-kilometre subscription. Various finance partners have been involved to make this program feasible. The company has further added sub packages within the BaaS to ensure that customers get a tailored fit solution. The company highlights that this approach benefits both frequent and occasional drivers, allowing them to pay based on usage. Additionally, MG estimates the cost of charging to be ₹1 per kilometre, further lowering the running cost compared to a petrol-powered car. The BaaS model not only reduces the initial purchase price but also provides a more affordable long-term ownership option for EV buyers.

How has the response been?

While BaaS has been termed as one of the most disruptive solutions in the market to increase EV adoption, the result however seems to have been fairly subdued. Hinting at lower than expected acceptance rate, Gupta explained that anything new takes time for acceptance, adoption and familiarity. Another key reason for the slow acceptance rate for BaaS is the conditions attached with the packages currently being offered. After speaking with potential buyers, it became clear that, in some cases, customers face higher monthly EMIs when opting for BaaS, further discouraging its acceptance.

Also watch: MG Windsor EV review: Crossing into crossover territory

However, Gupta believes that BaaS will be a game changer in the EV industry. Drawing parallels to the introduction of car loans, he noted that car loans were initially not widely accepted in India. Today, however, around 85 per cent of customers purchase cars through financing. Similarly, he expects that BaaS will eventually gain widespread acceptance over time.

Opportunities ahead with BaaS

Despite the slow start, MG is confident in the prospects of BaaS, Gupta expressed. He explained that BaaS along with other programmes like 60 per cent buy back value at the end of three years will allow the customers as well as the company to make EVs a profitable decision. Along with this, while BaaS will allow the customers to almost reduce their monthly cost by half as compared to an internal combustion engine, it also brings a price parity with ICE counterparts.

The MG Windsor EV for example which is a 4.3 metre long SUV is priced at ₹9.99 lakh with BaaS, which is exactly similar to what other ICE compact SUVs are being offered at. Showcasing confidence in BaaS, the company has further extended the programme to its other EV offerings such as the MG Comet EV and ZS EV.

However, Gupta believes that there is more to do to make BaaS a success in the market. While the company is expanding the programme across other EV models in the portfolio and trying to spread awareness amongst the customers about BaaS, he noted that industry as a whole also has a role to play.

Gupta revealed that following the footsteps of MG other OEMs in the country are also looking at introducing battery as a service option. He expressed that this is going to be a turning point in the adoption of EVs, and more importantly, it will influence more consumers to include EVs in their consideration set when purchasing a new vehicle.

Currently, only new players like Bajaj Finance, Hero FinCorp, and others are offering financial solutions for BaaS. Gupta noted that larger financial institutions are still hesitant to enter this space. However, once more OEMs introduce the BaaS progarmme, he expects the bigger players to follow suit and begin offering their solutions in the market

Gupta noted that EVs currently account for around 2 per cent of the market, with the potential to reach 7-8 per cent. He acknowledged that many consumers remain undecided about transitioning to EVs but believes that ongoing initiatives will help drive adoption. The more choices available, the better it is for the industry, ecosystem players, and investment opportunities. This will also align with and strengthen government initiatives, he explained.

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