As the Indian EV industry accelerates, more governmental reforms are underway to push the EV market through better infrastructure, newer technology and better consumer benefits on purchase of electrical vehicles. However, the market has not been free from setbacks. Reliability of EV batteries, EV’s driving range, safety protocols, fire hazards, road viability have always been topics of debate. However, today we will talk about EV battery manufacturers. EV Batteries form possibly the most critical component of an electric vehicle as they are the key driver of the transition to sustainable transportation For battery manufacturers, the evolving regulatory landscape presents a legal and financial challenge. Manufacturers must navigate a complex web of responsibilities to safeguard consumers while maintaining innovation.
Which laws govern EV Battery Manufacturers?
1. Motor Vehicles Act, 1988: The Motor Vehicles Act, 1988 (“MV Act”) and its implementing regulations are important in this respect. The MV Act regulates the requirements for vehicle building as well as other areas of vehicle use. It is important to remember that India does not yet have any central laws that exclusively regulate EVs. However, EVs are also subject to the MV Act’s regulations because they are considered “motor vehicles” under the statute.
2. ARIA Technical Standards: Automative Research Association of India (ARAI) is the premier research institute that sets standards for vehicle manufacturers in India. The ARAI develops standards for manufacturing of EVs and its components. In India, for every vehicle irrespective of its type, ARAI testing is mandatory. Some of the types of approvals include, amongst others, battery operated vehicles (as per AIS 049); hybrid electric vehicles (as per AIS 102), constructional and functional safety for battery operated vehicles (as per AIS 038), etc.
3. BIS Standards: The Bureau of Indian Standards (BIS) formulates standards for EV charging and batteries used in electric vehicles some of which include Indian Standards for AC/DC Charging, Indian Standards for Battery Swapping, Indian Standards for EV Batteries etc.
4. Consumer Protection Act, 2019: Protects EV owners against deficiency on part of EV and EV equipment manufacturers
5. Environment Protection Act, 1986: Provides guidelines and regulations on use of raw material and disposal of waste generated during the manufacture process.
Obligations on EV Battery Manufacturers
In India, EV battery manufacturers face various liabilities stemming from legal, regulatory, and consumer protection frameworks. These liabilities can be categorized as follows:
1. Product Liability: In wake of Consumer Protection Act, 2019, EV battery manufacturers can be held liable for any loss caused to a consumer due to any defects in manufacturing or design in batteries, including fires, explosions, or performance failures. Furthermore, inadequate labels or lack of safety instructions on the original equipment can result in consumer liability claims.
2. Environmental and Regulatory Compliance: As mentioned above, battery manufacturers are also governed by Environment Protection Act, 1986, Battery Waste Management Rules, and ARIA technical standards. Improper disposal of batteries and failure to adhere to norms setup by the association can lead to penalties. Further, non-compliance with rules regarding emissions during manufacturing or recycling can also result in fines.
3. Contractual Liabilities: Manufacturers are often bound by agreements with automakers and suppliers. Breaches, such as failure to meet quality or performance standards, could result in avoidable litigation and award of damages.
4. Safety Standards Compliance: EV batteries must adhere to safety standards outlined by the Bureau of Indian Standards (BIS) or similar authorities. Non-compliance can lead to recalls and penalties. Section 110A of the Consumer Protection Act allows the Central Government to recall defective vehicles which may cause a potential hazard to the public. Such recalls may cause loss of profit, derogation of shareholder wealth, and potential litigation.
Conclusion
As the Indian EV industry aims to capture 8% of the market share by 2028, major Indian manufacturers such as Tata and Mahindra creating a separate chain for electric vehicles, it is important for battery manufacturers to adhere to the extensive regulations and policies to support India’s green mobility revolution. It is important to put adequate mitigation procedures in place to address liability concerns for manufacturers, ranging from product safety and environmental compliance to consumer protection and contractual obligations. To thrive in this evolving landscape, manufacturers must prioritize stringent quality control, robust safety measures, and adherence to regulatory standards. EV battery manufacturers can not only safeguard their reputation but also contribute to a safer and more sustainable future for mobility in India.