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Battery swapping for EVs is already big in China – will it work out in S’pore too?

ev battery swapping

Battery-swapping has never become a mainstream charging method, although electric vehicle (EV) adoption has grown significantly over the past decade.

In fact, the idea of EV battery-swapping is nothing new at all.

In Europe, Israeli company Better Place inked a deal with Renault in 2008 to use its swapping system in EVs. Stations were built in Denmark and Israel, but the idea didn’t take off and Better Place eventually filed for bankruptcy in 2013.

better place ev battery swap
Image Credit: Techzle

Tesla later flirted with the idea that same year, but soon abandoned it for Supercharger stations.

While battery-swapping has been dormant in Europe and US, the technology is aggressively taking off in China, thanks to the investment of a few prominent EV companies.

As of February 2022, there were more than 1,400 battery-swap stations in China, which more than doubled compared to a year ago.

According to Bloomberg NEF, six Chinese companies plan to build more than 8,000 battery-swapping stations by the end of this year and eventually 26,000 by 2025. This is a 17-fold increase from current numbers.

Nio currently has the most extensive network with 836 battery-swapping stations in China, with plans to increase that to 1,300 globally by the end-2022. Nio also claims to make 30,000 swaps per day, hence leading the private market, but others are looking to close the gap.

In China, the battery-swapping technology is used for taxis and even trucks. Of the 10,513 ‘new energy’ heavy goods vehicles sold last year in China, 31 per cent had battery-swap technology fitted, according to figures from Bloomberg NEF.

Companies including Aulton New Energy and BAIC Corp. are targeting taxis and other fleets that are centrally managed and require longer daily driving range.

Meanwhile, companies like Geely’s Soland Energy and State Power Investment Corp. are testing battery swaps for trucks. Utilities and oil and gas companies such as Sinopec are also increasing investment in battery-swapping infrastructure.

Additionally, the entrance of battery company Contemporary Amperex Technology (CATL) will bring more momentum to the sector, adding to the possibility that other battery makers will also get vie for a slice of the pie in time to come.

How does EV battery swapping work?

The concept is pretty simple. The EV is driven into a booth and its depleted battery is then removed from the car, and replaced with a fully-charged power pack.

At the newest facilities today, this whole process is fully automated and can be completed within minutes. Customers can opt to either pay a monthly fee, or pay-per-use.

nio ev battery swap
Image Credit: Elektrek

Particularly for Nio, it launched a Battery-as-a-Service” (BaaS) subscription model in August 2020 — you can think of it as buying a car, but without the batteries included.

Since batteries remain the most expensive EV component, the plan saves owners RMB 70,000 (~US$10,000) on the car’s price. In return, owners pay about RMB 980 (US$142) a month to lease a 70 kWh pack with six monthly swaps.

The launch of this BaaS makes the purchase decision much easier and represents a better balance between the purchasing cost and the using cost.

With BaaS, both costs are lower than those of ICE cars in the same segment. At the same time, BaaS also represents a systematic solution to the long-existing challenges for EV penetration, including battery degradation, battery upgradability, and lower resale value.

What are the advantages of EV battery swapping?

The two main perks are speed and convenience.

It can take more than an hour to fully charge common electric vehicles (EVs), but swapping in a new battery only takes mere minutes.

ev battery swap
Image Credit: CGTN

A battery swap can take less than 10 minutes, including the navigation of car into the changeover bay. In contrast, even Tesla’s fast super-charging network takes at least half an hour to fully charge a battery, although it claims that its newest technology delivers 200 miles of charge in 15 minutes.

This can significantly save a lot of time for taxis and delivery fleets that are on the road all day, or drivers covering long distances who may not be able to plug in to a charger overnight.

Additionally, separating the power pack from the car can lower the upfront purchase price, reducing one of the main barriers of entry for drivers who are considering to switch to an EV.

Furthermore, the constant turnover of batteries makes it easier to monitor for defects and fix them before they catch fire or cause serious accidents like fires. Regular charging at swapping stations may also extend battery life. 

In the long run, it could also help cut down on the design and development costs for car manufacturers if they adopt a standardised battery for the convenience of swapping.

Battery-swap networks also lay a foundation for recycling of depleted batteries, which is a growing concern as early EVs reach the end of their lifespan and shortages of key battery components such as lithium worsen.

What about its downsides then?

However, not everyone is convinced about the battery-swapping technology.

“I think we’re complicating it by changing battery parts,” said Paul Philpott, CEO of Kia UK at a SMMT Electrified event in March.

“Charging times are going to come down,” he added, citing the already fast 18-minute time to get from 10 to 80 per cent charge on the new Kia EV6.

kia ev6
Image Credit: CarBuyer Singapore

Essentially, automakers are rolling out EVs with improved batteries that boast longer ranges and shorter charge times, which could make swapping obsolete.

Moreover, most battery-swapping stations have a limited supply of charged batteries on hand, increasing the risk for drivers that any time savings could be negated by waiting in line for a fully-charged pack to become available.

This means that sometimes, drivers would have to opt for a battery that’s only 70 or 80 per cent charged instead.

Given that battery structure accounts for a major part of a vehicle design, it might also be hard to persuade car manufacturers to give up control and embrace a standardised battery pack to facilitate automated swapping. 

Additionally, companies that are looking to get into the battery-swapping game face high startup costs as building an automated swap station can cost 10 times as much as setting up a fast-charging station. 

A Swedish study published last year quoted Nio figures of US$772,000 to build a swap station in China — including the batteries, site leasing, among other things — compared with US$309,112 for a bank of chargers.

To offset the high upfront investments, the Chinese government awards subsidies and incentives to specific battery-swap EV models.

To add on, it’s currently still unclear who would be responsible if a defective battery caused an accident or fire — the driver, the automaker, the battery maker, or the battery-swap operator. 

Will this catch on in Singapore?

One of the key components of making battery swapping viable is large-scale adoption of EVs by regular drivers.

This is not a problem in China where EVs in December 2021 accounted for one in five new-car sales, and deliveries are forecast to climb to 5.5 million vehicles this year, according to the China Passenger Car Association.   

Demographics and geography also play a part. Most Chinese EV drivers live in apartments and don’t have access to at-home charging, while high population density and the nation’s vast distances also increase the appeal of battery swapping. 

Singapore shares a similar demographic. Majority live in high-rise apartments and have limited access to EV chargers, though the government has boldly expressed that nearly 2,000 HDB carparks will have at least three EV charging points by 2025.

However, EV drivers in Singapore tend to have less demand for daily driving range. Regardless, battery swapping could prove useful in some cases, like fleets of vehicles all owned and operated by the same company.

It can work with a dedicated fleet that have very high value on time. If fast charging will take half an hour and the battery swap takes five minutes, you save 25 minutes. For delivery companies, that 25 minutes could be worth the cost of investing in backup batteries.

In a budget speech laid out for this year, India’s finance minister, Nirmala Sitharaman, said that “considering the constraint of space in urban areas for setting up charging stations at scale, a battery swapping policy will be brought out.

Singapore, who also has land/space-constraint woes, might do good by undertaking the same approach.

After all, it sidesteps any need for breakthroughs in battery capacity or speed. Rather than waiting to fill up a depleted battery, a driver could treat a car more like a camera or toy, swapping out the battery when needed.

ev battery swap electric bikes
Image Credit: ADV Pulse

The Land Transport Authority (LTA) recently announced that battery swapping for electric motorbikes is now possible.

Given their compact size and lower price point, smaller electric motorcycles cannot economically carry the necessary components onboard to charge the battery. By swapping batteries, this allows them to continue running, potentially reducing the total cost of ownership and increasing the convenience of using electric motorcycles.

In August 2020, Hyundai also revealed that it will trial BaaS at its new electric car manufacturing facility in Singapore, in which customers can buy an electric car without its battery and simply lease it from Hyundai. These batteries typically cost half the price of the car, so such service can help significantly reduce the cost of an electric vehicle.

With the government rolling out various initiatives and grants to drive down costs of EVs for Singaporeans, battery-swapping could definitely prove to be a viable option.


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Featured Image Credit: Qilai Shen, Bloomberg via Getty Images

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