Comprehensive guide to EV Battery Swap | Benefits & Reasons why it didn’t scale up

Wouldn’t it make sense to have an EV lane at the petrol station, where you can pull in and change battery? If it were possible to swap in a fresh one and motor on within 2-3 minutes, electric cars would be as easy to refuel as petrol cars. It would overcome one of the big obstacles to EV adoption.

But why hasn’t it happened, many wonder! Especially after last week’s news of NIO completing successful 500,000th swap, many of you asked me to write about the battery swap technology and why it did not scale-up in the west (US & Europe).

It’s not due to lack of trying. The companies in the US and Europe did try their best, as they would approach to any other new technology.

❌US company Better Place pioneered this kind of network and began installing battery stations in 2008 in Israel., but went bankrupt in 2013.

❌Gogoro developed a cloud powered battery swapping network, but did not manage to succeed.

❌Swedish start-up - Powerswap AB successfully replaced EV batteries with a help of robotic device within 3 minutes. But could not get funding for the next rounds.

❌Aleees developed a next Gen battery swapping system for E-bus; but couldn’t convince investors and raise money for their expansion.

❌ Even, Tesla experimented with battery swapping technology stations in early 2013, for its pilot of 200 invitation to EV owners, only four to five came to test.

In this article, let’s take a bit deeper look into the battery swap technology, how it works, what are the advantages it provides over Conductive or Inductive Charging, and yet why it’s not commercially viable in detail.

Battery Swapping Stations

A battery swapping (or switching) station is a place at which a vehicle's discharged battery or battery pack can be immediately swapped for a fully charged one, eliminating the delay involved in waiting for the vehicle's battery to charge.

Like a CPO in the conductive/ inductive charging space, here the battery swap owner / operator will have the ownership of the battery and will be liable for replacing the drained batteries with fresh, charged and standard ones.

Advantages of Battery Swap on EV:

There can be many advantages projected by the battery swap technology promoters, among which the below three are the key benefits of battery swap while comparing with plug-in or wireless charging.

1. Quicker refill time: With the advancement of robotic technology available now, an electric vehicle’s battery can be safely replaced and go to run within 3 minutes, whereas the conductive or inductive charging are still slower.

Faster DC conducted charging is possible, but can’t overlook the battery degradation while fast charging. In this perspective of quicker recharge/refill, the battery swap is superior to other modes of charging ; and would be as comparable to refuel as petrol cars.

2. Cost of Electric vehicles: One of the main reasons for the slow adoption of EV is their (still) higher costs. Batteries contribute to the significant percentage of the cost of an EV, and if we take-out of the battery cost from the equation, the cost of an EV can be reduce significantly.

By doing this, the cost of battery is not going to disappear; but innovative business models for the battery swap can recover the costs in longer duration., making the initial purchase price of EVs much more attractive.

3. Micro grids: These battery swapping stations are an aggregated storage, so they have the natural ability to participate in markets for electrical energy and reserve. The Battery Swap Stations can maximize its profits by providing services to the system, such as voltage support, regulation reserves, or energy arbitrage. 

P.C: ScienceDirect 

Reasons why EV Battery Swap didn’t scale up

Above mentioned advantages are clearly better than the plug-in charging, yet why did the battery swap fail miserably, at least in the US and in Europe? . Below are the four key challenges that pulled down the battery swap business.

1. Lack of standardization of EV battery packs:

Standardization of EV Lithium Ion Battery Packs has not happened globally. The probability of this happening in any part of the world is also questionable. This is mainly because, most of the auto OEMs preferring to control their design strategies for battery packs as their core technology.

EV’s battery and it’s management system (BMS) is the key area where every electric vehicle manufacturer would want to make a difference., so naturally the EV OEMS will not let the standardization of battery packs to happen.

Can you ever imagine Apple and Samsung to make interoperable and swappable batteries between their devices?. That exactly is the case with electric vehicles batteries too ; the standardization may never happen. When there is no standardization across the industry, the volumes will be low, thus higher costs.

2. Battery Ownership, reliability of leased /rented battery packs:

When the car OEMS don’t want to standardize swappable batteries across the industry, and the costs remain higher, there are chances that cheap poor quality battery packs will enter the market.

In quest of achieving profitability, if battery providers short change the customer and therefore causing a potential breach may lead to a serious disaster of swapping business and can create larger controversies as well.

Fortunately, the US and Europe market was never in support of any risky, low quality cheap products, thus the cost of external battery swap stayed high; making difficult to invest on battery ownership.

3. Lack of commercially viable business models:

When the costs of battery ownership, setting-up swap stations remain high and lacks clear standardization and regulations, it is difficult to create any profitable business case.

Government subsidies & incentives are still the large drivers for the uptake of electric vehicle market. When it is difficult to set standards & regulations, the governments can not allow any subsidy for this business, nor the private investors will be ready to pump-in their funds.

This blog of Dr Parag Diwan explains all the aspects of battery swap in detail. I encourage the readers to go through if onewants to gain deep understanding on the battery swap technology & business cases.

In summary:

Functionally speaking, battery swapping makes a compelling story but as we try and understand in deep, the reality is much different and harder to scale-up as a business, at least in the US and Europe.

Things can be a bit different in Asian markets like China or India, which are predominantly cost driven; and also the large volume of vehicles in those markets. It is much easier to get a duplicate battery for any brand smart phones in these markets, at 1/10th of the original price. But that is not the case in the western market., so eventually let the battery swapping industry to be dead. 

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