ELECTRIC VEHICLES Battery swapping: A major growth driver for the electric vehicles market
The global EV battery swapping market share is currently in its development stage but is projected to grow at a significant rate between now and 2030 as government-backed incentives and demand for EVs increase.
According to a recent study carried out by P&S Intelligence, the most important growth driver for the global Electric Vehicle (EV) battery swapping market for two- and three-wheeler vehicles is the expansion of the EV industry. Indeed, the latter is itself a result of strong government-backed incentives and support packages in many developed nations for the adoption of greener transportation, particularly in countries like China and Japan which are infamous for their high levels of air pollution.
However, there’s a major restraint when it comes to consumer adoption of EVs - the high cost, which is usually a result of their expensive batteries. This is something that’s ultimately boosting the EV battery swapping market for two- and three-wheeler EVs. By buying an EV battery separately, the cost of the EV falls significantly.
A casualty of the COVID-19 pandemic
The study highlights that the automotive industry in general has been one of the hardest hit by the COVID-19 pandemic, with sales of vehicles stalling to almost zero in many places. This has predictably caused a great loss for the EV battery swapping market because with no EV sales of two- and three-wheeler EVs, swapping businesses are having to cease operations.
Previously, the bifurcation subscription model held the largest share in the EV battery swapping market for two- and three-wheeler EVs based on service type. This model enables EV owners to lease batteries and cut swapping expenses, thus making EVs more affordable in the long term.
Li-ion bifurcation on the basis of battery type is expected to see the higher compound annual growth rate in the battery swapping market for electric two- and three-wheelers over the next few years. Due to their high energy density metrics, falling prices, and green advantage, the use of Li-ion batteries in two- and three-wheeler applications is growing rapidly, accounting for 97 % of all EV batteries in use today in Europe.
Other factors benefitting the EV battery swapping market
There are many other factors benefitting the EV battery swapping market. One of these relates to charging time - this is a major constraint because recharging an EV battery takes a lot of time. In addition, a there’ll need to be a much higher availability of charging points to fight so-called “range anxiety”, a problem which sees potential EV owners put off by the prospect of the risk of running out of juice while on the road. Suitable space for accommodating these charging stations is challenging, though.
Moreover, the availability of DC fast chargers and the challenges associated with installing them is a major concern for EV stakeholders. This is further benefitting the battery swapping market because swapping technology drastically decreases waiting times through its sub 3-minute interchange of batteries versus the minimum times to charge an EV battery, usually between one and two hours.