<p><em>Anmol Jain AND Nitish Arora</em></p>.<p>India’s electric vehicle (EV) sector is gaining traction, with EVs accounting for 7.5% of total vehicle sales in FY 2024–2025 — nearly 2 million units sold, 60% of which were electric two-wheelers.</p>.<p>Despite this progress, the country remains far from its ambitious 2030 EV penetration goals. Key hurdles such as high upfront costs, inadequate charging infrastructure, range anxiety and limited model availability are impeding the adoption.</p>.<p>Another major bottleneck is the lack of affordable and accessible financing. Traditional auto loans, designed primarily for internal combustion engine (ICE) vehicles, fail to address the unique characteristics of EVs — high upfront costs, uncertain residual value and rapidly evolving technologies.</p>.Karur tragedy exposes recurring lapses.<p>The lack of historical data on EV performance and battery reliability adds to perceived financier risks. Consequently, EV buyers, both personal and commercial, face up to 9% higher interest rates, 6-18 months shorter loan tenures and 10-30% lower loan-to-value (LTV) ratios than ICE buyers.</p>.<p>Commercial EV loans are hit hardest due to lender concerns over vehicles’ operational reliability, resale value and battery degradation.</p>.<p>At the core of this issue is the battery, which makes up nearly 40% of an EV’s cost. The secondary market value of EV batteries for reuse in second-life applications or recycling remains poorly defined due to a lack of clear valuation framework for the end-of-life batteries. This significantly increases the perceived risks, further restricting financing options and slowing the EV market penetration.</p>.<p>This necessitates digitalised solutions that can provide transparent, real-time insights into a battery’s remaining useful life. Such tools can significantly enhance consumer confidence, unlock financing opportunities and enable new business models for second-life applications, repurposing and recycling.</p>.<p>In May, the Department of Science & Technology (DST), Niti Aayog, the World Resources Institute (WRI) India, and the United Nations Environment Programme proposed a national Battery Aadhaar Initiative to boost circularity, reduce import dependence and enhance resource security.</p>.<p>Battery Aadhaar is India’s opportunity to build a robust digital infrastructure that can track and verify battery performance, safety and value throughout its lifecycle. Akin to the European Union (EU)’s battery passport system, it is envisioned as a unique digital identity for every battery that would record battery-specific data, such as battery chemistry, usage history, state of health (SoH), safety incidents and recycling or second-life status.</p>.<p>By standardising such norms, Battery Aadhaar will serve as a comprehensive digital record for stakeholders through tiered access levels. Public users may view limited and non-sensitive data, while licensed entities such as Original Equipment Manufacturers (OEM), insurers and financiers can access anonymised health metrics. Regulators would have full access to ensure compliance, safety and policy monitoring.</p>.<p>India is currently in the early stages of EV adoption, with most batteries yet to reach their end of life. Once they do, these batteries are projected to unlock a potential 49 GWh market for second-life applications by 2030.</p>.<p>The end-to-end traceability will create multiple benefits for second-life utilisation by assessing battery health and directing batteries toward reuse, refurbishment, or recycling and supply chain transparency through data collection from contributors, such as OEMs, authorised service providers, recyclers and regulatory authorities. It also has the potential to support critical mineral recovery, reduce import dependence and aid evidence-based policymaking.</p>.<p>Accountability mechanisms will strengthen trust and compliance, ensuring stakeholders uphold performance, maintenance and safety standards. The framework can also support new business models, like second-life markets, and carbon credit platforms that reward eco-friendly practices. By standardising how used batteries are valued, it can also lower financing risks, helping lenders offer lower interest rates and longer loan terms.</p>.<p><strong>Learning from global initiatives</strong></p>.<p>India is not alone in this situation; different countries have come up with varied frameworks to tackle battery traceability.</p>.<p>The EU’s 2023 Battery Regulation requires digital passports for EV and industrial batteries over 2 kWh by 2026. By 2027, batteries must carry a QR code giving detailed information on battery type, model, chemical composition, intended use, performance, carbon footprint data and durability statistics.</p>.<p>The EU has set a target to achieve a minimum recycling efficiency of 70% for lithium-based batteries by December 2030. Battery passports also lower procurement and testing costs, reduce recycling pre-processing expenses and improve recycling rates by extending battery service life.</p>.<p>China’s traceability framework, introduced in 2018, mandates that all EV batteries be assigned a unique identification number (UIN), registered on the National Monitoring and Comprehensive Management Platform for Power Battery Traceability. It also mandates updates within 10 working days following key events like sales, servicing, repurposing, or recycling.</p>.<p>To align with the global best practices, the Battery Aadhaar Initiative will need to be adapted to India’s unique context — a large informal sector, high-cost sensitivity, and varying levels of digital readiness.</p>.<p>Governance and implementation strategy: The challenges for Battery Aadhaar — high infrastructure costs, fragmented supply chains, OEMs’ reluctance to share data, absence of standard protocols, risks of data breaches — underscore the need for robust legal safeguards and secure access controls.</p>.<p>One potential solution is the creation of an independent body under a designated ministry that would be responsible for assigning unique digital IDs, overseeing data collection, validation and sharing, while ensuring strong safeguards for privacy and security.</p>.<p>To mitigate risks of data misuse, competitive sensitivities and interoperability challenges, the framework should be supported by robust governance mechanisms. This can be modelled on the Unique Identification Authority of India (UIDAI), which serves as a benchmark for large-scale and secure identity and data management systems.</p>.<p>A phased rollout, beginning with pilot projects, can help fine-tune the system. The DST could play a key role in establishing proof of concept through these pilots, which would test data-sharing models, stakeholder incentives and integration protocols across both urban and rural contexts. Insights from these trials will not only guide national implementation but also build the trust and transparency essential for long-term adoption. </p>.<p>(Anmol is senior research associate, Alliance for an Energy Efficient <br>Economy; Nitish is associate director, Clean Transportation, NRDC India)</p><p><em>Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.</em></p>
<p><em>Anmol Jain AND Nitish Arora</em></p>.<p>India’s electric vehicle (EV) sector is gaining traction, with EVs accounting for 7.5% of total vehicle sales in FY 2024–2025 — nearly 2 million units sold, 60% of which were electric two-wheelers.</p>.<p>Despite this progress, the country remains far from its ambitious 2030 EV penetration goals. Key hurdles such as high upfront costs, inadequate charging infrastructure, range anxiety and limited model availability are impeding the adoption.</p>.<p>Another major bottleneck is the lack of affordable and accessible financing. Traditional auto loans, designed primarily for internal combustion engine (ICE) vehicles, fail to address the unique characteristics of EVs — high upfront costs, uncertain residual value and rapidly evolving technologies.</p>.Karur tragedy exposes recurring lapses.<p>The lack of historical data on EV performance and battery reliability adds to perceived financier risks. Consequently, EV buyers, both personal and commercial, face up to 9% higher interest rates, 6-18 months shorter loan tenures and 10-30% lower loan-to-value (LTV) ratios than ICE buyers.</p>.<p>Commercial EV loans are hit hardest due to lender concerns over vehicles’ operational reliability, resale value and battery degradation.</p>.<p>At the core of this issue is the battery, which makes up nearly 40% of an EV’s cost. The secondary market value of EV batteries for reuse in second-life applications or recycling remains poorly defined due to a lack of clear valuation framework for the end-of-life batteries. This significantly increases the perceived risks, further restricting financing options and slowing the EV market penetration.</p>.<p>This necessitates digitalised solutions that can provide transparent, real-time insights into a battery’s remaining useful life. Such tools can significantly enhance consumer confidence, unlock financing opportunities and enable new business models for second-life applications, repurposing and recycling.</p>.<p>In May, the Department of Science & Technology (DST), Niti Aayog, the World Resources Institute (WRI) India, and the United Nations Environment Programme proposed a national Battery Aadhaar Initiative to boost circularity, reduce import dependence and enhance resource security.</p>.<p>Battery Aadhaar is India’s opportunity to build a robust digital infrastructure that can track and verify battery performance, safety and value throughout its lifecycle. Akin to the European Union (EU)’s battery passport system, it is envisioned as a unique digital identity for every battery that would record battery-specific data, such as battery chemistry, usage history, state of health (SoH), safety incidents and recycling or second-life status.</p>.<p>By standardising such norms, Battery Aadhaar will serve as a comprehensive digital record for stakeholders through tiered access levels. Public users may view limited and non-sensitive data, while licensed entities such as Original Equipment Manufacturers (OEM), insurers and financiers can access anonymised health metrics. Regulators would have full access to ensure compliance, safety and policy monitoring.</p>.<p>India is currently in the early stages of EV adoption, with most batteries yet to reach their end of life. Once they do, these batteries are projected to unlock a potential 49 GWh market for second-life applications by 2030.</p>.<p>The end-to-end traceability will create multiple benefits for second-life utilisation by assessing battery health and directing batteries toward reuse, refurbishment, or recycling and supply chain transparency through data collection from contributors, such as OEMs, authorised service providers, recyclers and regulatory authorities. It also has the potential to support critical mineral recovery, reduce import dependence and aid evidence-based policymaking.</p>.<p>Accountability mechanisms will strengthen trust and compliance, ensuring stakeholders uphold performance, maintenance and safety standards. The framework can also support new business models, like second-life markets, and carbon credit platforms that reward eco-friendly practices. By standardising how used batteries are valued, it can also lower financing risks, helping lenders offer lower interest rates and longer loan terms.</p>.<p><strong>Learning from global initiatives</strong></p>.<p>India is not alone in this situation; different countries have come up with varied frameworks to tackle battery traceability.</p>.<p>The EU’s 2023 Battery Regulation requires digital passports for EV and industrial batteries over 2 kWh by 2026. By 2027, batteries must carry a QR code giving detailed information on battery type, model, chemical composition, intended use, performance, carbon footprint data and durability statistics.</p>.<p>The EU has set a target to achieve a minimum recycling efficiency of 70% for lithium-based batteries by December 2030. Battery passports also lower procurement and testing costs, reduce recycling pre-processing expenses and improve recycling rates by extending battery service life.</p>.<p>China’s traceability framework, introduced in 2018, mandates that all EV batteries be assigned a unique identification number (UIN), registered on the National Monitoring and Comprehensive Management Platform for Power Battery Traceability. It also mandates updates within 10 working days following key events like sales, servicing, repurposing, or recycling.</p>.<p>To align with the global best practices, the Battery Aadhaar Initiative will need to be adapted to India’s unique context — a large informal sector, high-cost sensitivity, and varying levels of digital readiness.</p>.<p>Governance and implementation strategy: The challenges for Battery Aadhaar — high infrastructure costs, fragmented supply chains, OEMs’ reluctance to share data, absence of standard protocols, risks of data breaches — underscore the need for robust legal safeguards and secure access controls.</p>.<p>One potential solution is the creation of an independent body under a designated ministry that would be responsible for assigning unique digital IDs, overseeing data collection, validation and sharing, while ensuring strong safeguards for privacy and security.</p>.<p>To mitigate risks of data misuse, competitive sensitivities and interoperability challenges, the framework should be supported by robust governance mechanisms. This can be modelled on the Unique Identification Authority of India (UIDAI), which serves as a benchmark for large-scale and secure identity and data management systems.</p>.<p>A phased rollout, beginning with pilot projects, can help fine-tune the system. The DST could play a key role in establishing proof of concept through these pilots, which would test data-sharing models, stakeholder incentives and integration protocols across both urban and rural contexts. Insights from these trials will not only guide national implementation but also build the trust and transparency essential for long-term adoption. </p>.<p>(Anmol is senior research associate, Alliance for an Energy Efficient <br>Economy; Nitish is associate director, Clean Transportation, NRDC India)</p><p><em>Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.</em></p>
