(Battery as a service) The BaaS model was coined in China back in 2014 when the EV revolution was ramping up, and high upfront cost was one of the most pressing issues faced by Chinese companies. To solve this issue, NIO, a prominent EV manufacturer in China, formally started offering batteries on a subscription model. Following NIO, many other companies like Gogoro, Sunmobility got involved in similar offerings.

The BaaS and battery swapping combined generated $240 million in revenue in 2024 in India itself and are expected to generate $ 2.7 billion in 2030. Seeing such immense growth, many other companies like Hero Motocorp, Ather Energy, TVS, Bounce, etc. are planning to explore this growing opportunity.

In India, BaaS is widely implemented in the EV 3-Wheeler market, but is considered a failed concept in the 2 and 4-wheeler market. But in the latest developments, Hero Motocorp has launched a BaaS model with their newly launched Hero Vida VX2 electric scooter. But why?

Have the scenarios changed? Or people started to incline towards BaaS?

In this article, we’ll answer all these questions and discuss how relevant BaaS is in India, and break down BaaS to the most minute financial level, so that you can understand whether this model is made for you or not.

How BaaS works in the Backend

The core concept of BaaS is paying according to usage instead of paying the full upfront cost of the battery/EV. So, if you check these 2 check boxes, then it’s BaaS

The full upfront cost is not paid

You’re paying based on the usage of EV.

Now the Battery-as-a-Service (BaaS) is an umbrella term for these 4 models

1. Battery Swapping
2. Battery Leasing
3. Pay per usage
4. EV leasing.

Battery Swapping is well-known in the market. You pay only when you swap.

Battery leasing is where you pay a fixed amount every month regardless of the battery usage.

Pay-per-usage, now this is something that’s getting popularize in the market. According to this model, you pay per unit of km driven, or per unit consumed kWh, or per hour of active usage etc. Each of these parameters is governed by a smart IOT device connected with the battery’s BMS.

EV leasing, in this model, includes the whole vehicle with battery, insurance, and maintenance at a single monthly subscription.

Which company is involved in it, in what way

Now, since BaaS has 4 types each models have a different value chain proposition and way of working. Let’s now explore how each model works in the backend. (Will start with easiest first :))

Pay-per-use: In this modal only 2 key entities are involved;

1. OEM from whom you’ve taken the vehicle considering they are the sole provider of battery on a subscription model.
2. Financial underwriters, they make sure about the asset security. This entity mainly works in the EV 3 Wheeler segment and required the least for the 2 and 4 wheeler market.

Battery Swapping: this model 5 entities that work together;

1. OEM’s**,** they make sure the vehicle is compatible for battery swapping. Sometime the companies provide the vehicle without the battery all together and the users are on the battery swapping plan from day 1.
2. Swapping Station Provider**,** these companies sets up the infra that includes, battery inventory, charging infra, power infra, and swapping station. This entity is responsible for the battery availability, and maintenance of the station.
3. IOT and tech provider, ****EV battries are complex and most of the time it’s another company that’s making the battery tech for the OEM that I mentioned above and the IOT provider is a diffrent entity all together that installs the BMS, and IOT inside the battery for its longer life, tracking, and protection.
4. Financiers and Underwriters, ****they are a crutial part of a BaaS because when we are providing a battery that worth thousands it’s importent to know if the customer is legitimate to give or not. This entity make sure the customer is good to go with or not.

Battery Leasing: In this models we need only 2 entities;

1. Battery provider, they’ll provide battery chemistry and tech enabling the batteries with tracking and a dashboard to manage the health of the battery.
2. Leasing provider, they work in the B2C space enabling the users with the battery on a LTO model (Lease to own). This entity is responsible for managing the battery inventory doing the underwriting, asset management, asset recovery and user application.

BaaS financial breakdown from OEM to customer

In 2025, we are sitting at 7% ev penetration in the 2-wheeler space, which is not bad, but considering our goal of 2030 to reaching 80% penetration we need to increase our pace. The biggest hindrance in the industry is the upfront cost of EVs, which is highly dependent on the battery. The battery takes upto 40% cost in the whole EV and due to this, EV’s are still an expensive purchase for a middle-class Indian buyer.

To solve this problem many startups have come up with innovative ideas but BaaS has been the most successful out of all. Let’s see why so and work on the unit economics of BaaS.

Let’s take the example of a Zomato delivery guy;

He/She drives 120kms daily and on a normal ICE motorcycle (per/km cost = 2.5 rupee) that costed him 70,000 for purchasing and costing them 2.5×120 = 300 everyday. So, by the month he’d have spent 9000.

Whereas if he/she had bought the vida VX2 for 54,000 on a pay per use model there per/km cost would’ve come down to 1.2 rupees and in one day he would’ve spend just 1.2×120 = 144 in a month close to 4320

Category	ICE Motorcycle	EV (Vida VX2 with BaaS)
Upfront Vehicle Cost	₹70,000	₹54,000
Daily Running Cost	₹2.5/km × 120 km = ₹300	₹1.2/km × 120 km = ₹144
Monthly Running Cost	₹300 × 30 = ₹9,000	₹144 × 30 = ₹4,320
Annual Running Cost	₹9,000 × 12 = ₹1,08,000	₹4,320 × 12 = ₹51,840
Total Yearly Cost (Running + Vehicle)	₹70,000 + ₹1,08,000 = ₹1,78,000	₹54,000 + ₹51,840 = ₹1,05,840

This shows a clear savings of 54000 rupees which matters a lot for a delivery person.

How it’s cost effective for OEMs and manufacturers

Although BaaS looks clean on paper but in reality it’s very difficult to implement it. The most challenging part is to manage the asset safety and management, but while there are issues OEMs benefits with it in the following ways;

• A whole new market opens up for them with the reduced cost and the EV adoption surges.
• Recurring revenue stream, instead of a one-time profit from selling the vehicle, OEMs now earn continuous income from battery subscriptions or swaps, improving long-term profitability.
• Better asset utilization: In swapping or leasing models, the same battery pack can serve multiple users over its lifespan, enhancing the return on each battery asset.
• Data monetization: With real-time BMS and IoT integration, manufacturers gather battery performance, usage, and rider behavior data at scale—valuable for R&D, predictive maintenance, and even cross-selling.
• More control over ecosystem: BaaS lets OEMs build closed-loop ecosystems (like Hero Vida or Bounce Infinity) where users remain within their service network for energy, upgrades, and maintenance.

Things to consider before opting for BaaS

Things to Consider Before Opting for BaaS

Battery-as-a-Service (BaaS) can be a game-changer—but only if it aligns with how you actually use your EV. While the idea of lower upfront cost and flexible usage is appealing, not every rider benefits equally from BaaS. Let’s break down different user scenarios and evaluate when BaaS makes sense—and when it doesn’t.

1. Daily High-Mileage Users (e.g., Delivery Riders, Couriers)

Best Fit for BaaS

If you’re driving 100+ km per day (like Zomato, Swiggy, or Amazon delivery partners), BaaS is likely highly profitable for you. Lower running costs (₹1.2/km vs ₹2.5/km for ICE), reduced upfront investment, and zero maintenance of batteries make it ideal. The more you ride, the more you save.

Break-even is usually achieved within a few months.

2. Occasional Commuters (e.g., office goers, students)

Moderate Fit

If your daily ride is under 25–30 km, you may not benefit significantly from BaaS. In such cases, buying the battery outright (or choosing a fixed monthly lease) might be cheaper over time. Pay-per-use can add up to more than a fixed EMI in the long run if you’re not clocking distance.

Consider a flat leasing plan instead of a per-km model.

3. Rural or Semi-Urban Users with Limited Access to Swapping Stations

Low Compatibility

BaaS, especially battery swapping, is not yet viable in areas without strong infrastructure. If you’re located where swapping stations or battery service hubs are sparse, owning a fixed battery is a more dependable and hassle-free option.

Check infrastructure availability before committing to BaaS.

4. Fleet Operators and Shared Mobility Players (e.g., rentals, last-mile logistics)

Excellent Fit

For businesses running a fleet of EVs, BaaS simplifies operations and finances. It allows for:

• Lower capex per vehicle
• Efficient battery rotation
• Uptime maximization

BaaS reduces downtime and keeps TCO low for high-utilization vehicles.

5. Tech-Savvy Users Focused on Sustainability and Upgradability

Strong Fit

If you’re an early adopter who values battery health visibility, OTA updates, and battery tech upgrades, BaaS gives you access to the latest tech without being tied to one aging battery.

With IoT-powered BMS, users get better analytics, battery health scores, and upgrade options.

Checklist Before Opting for BaaS

• Do you ride >50–60 km/day?
• Is there swap/charging infra in your area?
• Do you want to avoid battery degradation risks?
• Would you prefer lower upfront cost over long-term ownership?

If you answered “yes” to most of the above, BaaS is probably the right choice for you.

Past Case Studies and Future of BaaS:

Here we’ll talk about various companies that’ve attempted to implement the BaaS, what issues they faced, and considering the future scenarios will baas make it’s space in the market. and if so which companies will be make profit from this?

BaaS isn’t a new discovery the Indian market just got ready for it now. Initially Ather offered there scooter with battery on a subscription model which didn’t get a good response back in 2020 but now the market is mature enough to accept the offering. Here are the following companies providing BaaS solution and how their conditions are:

1. E-Chargeup Solutions: They provide battery leasing solutions to EV 3 wheelers and started 9 year ago they’ve recently became profitable. Which is a clear indication of company’s excellence and how good this model is.
2. Hero Vida: Among the top EV makers Hero is making the right decision for becoming a remarkable name in the EV 2 wheeler industry. Recently they launch hero vida VX2 which they are offering with BaaS model on a pay per use bases. The market currently has mixed reviews on it but as some time passes then we can talk about the fruitfulness of the model.
3. Ather Energy: Recntly in talks Ather is also planning to launch there scooter on a BaaS model providing the market a far batter option at a very reasonable cost.

Future of BaaS:

If we look at the current stage the BaaS model is proactively working in the EV 3 wheeler industry and although this model has been a success in the market the providers are facing a lot of challenges running this business in such un-organized market. Where as in 2 wheeler personal vehicle space such challenges are negligible yet there are zero providers which needs to be changed and in-fact this is just the right time for a change. As the market has become matured enough to accept this mode.

Conclusion

Battery-as-a-Service is no longer just a buzzword—it’s shaping up to be a foundational pillar of India’s EV transition, especially as we target deep electrification by 2030. With the right mix of technology, infrastructure, and financing, BaaS can solve the two biggest hurdles to EV adoption: high upfront cost and range anxiety.

While its current success is mostly limited to the EV 3-wheeler segment, evolving consumer behavior, rising fuel costs, and supportive government policies are paving the way for BaaS to enter the 2-wheeler and fleet segments in a more meaningful way. Companies like Hero, Ather, and E-Chargeup are already leading this wave, betting on a future where ownership gives way to access and flexibility.

That said, BaaS isn’t a one-size-fits-all solution. For high-mileage users and fleet operators, the cost and operational advantages are clear. But for occasional riders or users in infrastructure-light areas, traditional battery ownership might still make more sense—for now.

In the coming years, as IoT integration improves, battery performance increases, and swap networks expand, BaaS will likely evolve from being an alternative to becoming the default EV ownership model, especially in India’s dense urban mobility landscape.

So if you’re planning to make the switch to electric, BaaS might just be the smartest and most financially viable path—provided you tick the right boxes.