BaaS lowers entry cost of owning an EV, but may not always be cheaper

Assess your usage intensity and ownership period before making a decision

- SANJAY KUMAR SINGH & KARTHIK JEROME

Battery as a Service (BaaS), introduced in India in September 2024, is now about one year and nine months old.

JSW MG Motor India, Tata Motors, Maruti Suzuki, Kia India, and Toyota Kirloskar Motor currently offer this model. Buyers considering an electric vehicle (EV) with the BaaS model need to examine whether the lower upfront cost justifies the recurring payments and resale-related uncertainties of this mode of purchase.

How it works

BaaS separates the cost of the vehicle from the cost of the battery. The customer buys the vehicle without the battery and instead pays a recurring fee for battery usage. This is usually based on a pay-per-kilometre model, often with a mandatory charge for a minimum number of kilometres. The per-kilometre charge ranges from around ₹2.60 to ₹5 per kilometre. Battery ownership remains with the financing partner. “The battery financing duration is typically seven years,” says Jugnu Sakuja, managing director - automotive, business transformation services, Alvarez & Marsal India.

Lower upfront cost

The biggest advantage of BaaS is the lower upfront purchase price. “Buyers avoid paying for the battery, an EV’s single most expensive component,” says Ravi Bhatia, president, JATO Dynamics India.

Sakuja adds that BaaS lowers the entry point and brings the price closer to that of an internal combustion engine vehicle. The running cost is also lower.

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