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E-MOBILITY BATTERY Battery swapping: can the benefits surpass the challenges of implementation?

From Cate Lawrence

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Swappable batteries have come under renewed focus in Europe, with Chinese carmaker NIO expanding to Germany this month. What is the business opportunity for battery swapping?

NIO launches its first car and swap station in Norway last year. Others are panned throughout Europe.
NIO launches its first car and swap station in Norway last year. Others are panned throughout Europe.
(Source: NIO)

Earlier this month, Chinese carmaker NIO held a launch event in Berlin to detail their expansion into the European market. The automaker plans to release three new car models for purchase or rental. This includes a long-term subscription service for a minimum of 999 EUR monthly, and a new 150 kWh Ultra Long Range battery pack for its EVs, which we'll see sometime next year. But what's really interesting is their plan to have 20 battery swap stations active by the end of this year, with a plan to increase to over 120 stations in 2024.

The company has its eyes on Europe. It launched its first car and swap station in Norway last year. This year saw the launch of its first overseas plant, the Power Europe Plant in Pest megye Hungary, where it started battery operations in September.

NIOs battery swap stations act as an alternative to fast charging. They can be initially rented by car buyers or purchased as part of the car. As well as creating new business models such as those on offer by NIO they offer numerous advantages: Greater reliability than battery charging.

Battery charging is time-consuming, with the demand for chargers high in peak times. And that's if you can find one that works. In April this year, researchers from the University of California (and partners) published a paper about charger reliability in the Greater Bay Area. It found that 1 in 5 chargers were non-functioning, were unresponsive or unavailable, had broken screens, payment system failures, charge initiation failures, network failures, or broken connectors.

It doesn't bode well, considering the region has the most EV chargers in the US and is home to companies like Cruise, Lyft, Uber, Rivian, and Lucid Motors.

It's unclear how many EV chargers are inoperable at any time in the EU. But out-of-operation chargers act not only as a disincentive for potential EV buyers already suffering from fear of range anxiety, but also as a practical problem for EV owners without access to private chargers.

Value for B2B vendors and fleet operators

Nio is not the only company invested in a swappable future. In San Francisco, Ample has developed a fully automated battery-swapping robot that can swap a car battery in minutes.

The company's focus is B2B, such as hire cars and government fleets. Ride-hail operators like Uber drivers are also local clients, which makes sense. They drive their cars hard for long stretches across multiple driver shifts, and time spent charging is time without earning. Ample can swap their batteries over in 10 minutes at a pop-up garage – far quicker than using a charging station.

Greater battery insights

Battery swapping provides the opportunity for valuable battery analytics. For example, Ample uses historical data and real-time analytics to understand the health of every cell in each battery in its fleet. They can understand how one battery cell compares to another in terms of behaviour, range and ageing. They also know how many times a battery has been charged before it starts to degrade. This helps gain insights into how batteries age and how fleets can optimize them over their lifetime. It also ensures that healthy batteries aren't swapped for a faulty battery or one at the end of its EV lifetime.

Convenience and access to greater innovation

With NIO, you can swap a battery for one with greater power. This suggests the potential for a future model of offering rental batteries at different price points depending on the driver's needs.

Commitment to circularity

Battery makers are required to comply with stringent battery recycling regulations. Battery swapping makes it easy to extract a battery that is no longer serviceable in powering a car and send it for use in a second life such as powering industrial storage.

However, there are also downsides to battery swapping in its current form. There is, at present, no real standardization when it comes to battery design. Most car makers don't design their batteries in-house, and their designs are proprietary, with intensive R&D for range and power innovation. Because of this, they lack the necessary cross-platform compatibility for battery swapping.

Currently, Ample offers a drop-in replacement for the original battery design and can swap in a different number of battery modules as needed to accommodate varying battery sizes. But is this enough for mainstream adoption at the automaker level? What does it mean for competition in battery R&D? Will carmakers be willing to support the evolution of swappable batteries, and will the option prove popular enough with car buyers to accelerate the retail opportunity?

A Gogoro battery swap station.
A Gogoro battery swap station.
(Source: Gogoro)

There's also the question of where to situate all these recharging stations at scale – cities are having enough challenges finding the right spots for public EV chargers.

The appeal is already real in other mobility modes.

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A Swobbee battery swap
A Swobbee battery swap
(Source: Kumpan Electric)

Swappable batteries have held a strong position in mopeds and motorbikes, especially in Asia, with companies such as Taiwan's Gogoro, Germany's Swobbee and UK HYBA providing a range of options for motorbikes, mopeds, ebikes, and escooters through Battery-as-a-Service and Charging-as-a-Service options.

One advantage is battery safety monitoring, which gets damaged batteries out of circulation and reduces the risk of lithium-ion battery fires.

In motorbikes, the industry group Swappable Motorcycle Consortium, has over 20 OEMs and other industry players on board working on industry standards. There's also potential for trucks. Commercial vehicle and heavy machinery giant Sany launched three battery swap stations in China last year. Will automakers choose to join the trend?

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