MG Motor’s battery-as-a-service model in India’s EV market

News, 01 Nov 2024

A new approach to electric vehicle (EV) ownership in India has been taken by MG Motor India with the recent launch of a Battery-as-a-Service (BaaS) model for its electric vehicles.

The automaker hopes to reduce the purchase price of models like the Windsor, Comet, and ZS EV by decoupling the battery from the vehicle’s initial cost, thereby increasing the affordability of EVs. But even with its financial advantages, the BaaS model is probably going to have a hard time winning over Indian customers who have historically preferred complete asset ownership.

Lowering Ownership Costs with Pay-Per-Use Battery Models

Customers can purchase the car without the battery with MG’s BaaS model, significantly reducing the vehicle’s price. For example , the EV base model of Windsor’s, ex-showroom, costs INR 9.99 lakh without the battery. Customers can choose between two options rather than a single loan that covers the entire car: a fixed EMI for the car and a variable battery rental cost based on usage.

With a monthly minimum usage of 1,500 kilometers, battery prices are set at INR 3point 5 per kilometer, meaning that customers only pay for the battery power that they actually use. Additionally, MG is offering early adopters extra incentives by covering the first year’s worth of public charging costs (via their charging app). Beginning in the second year, customers will be charged INR 1 per kilometer.

Resolving Customer Issues with Charging Access, Battery Life, and Resale Value

Beyond price, MG Motor is aggressively addressing consumer concerns, such as uncertainty regarding battery life and resale value, that frequently impede the adoption of EVs. In order to allay concerns about depreciation MG Motors would allow customers to return the vehicle for 60% of its original value after three years. Furthermore, MG has pledged to control battery life, providing complete support for the duration of the customer’s ownership of the vehicle.

By providing a year of free charging on public networks that are accessible through their app, MG has also addressed issues with the charging infrastructure. This offer aims to improve convenience and reduce range anxiety for new EV owners, especially those in less EV-dense areas, even though research shows that 85% of EV owners primarily charge at home.

Market education and wider support are essential for the widespread adoption of EVs.

A significant change in the Indian EV market might be prompted by MG’s BaaS model, particularly if other automakers follow suit. For the time being, customer education and change in perspective toward flexible ownership are key to the BaaS model’s success.