EV Battery Swap Back in Vogue but For How Long?

Russia’s SberAutoTech has demonstrated a prototype of an urban mobility system named Flip, aimed at the robo-taxis and delivery markets.

It is comprised of a hive of connected SAE Level 5 electric shuttle buses and battery swap stations. The vehicles feature identical vertical battery compartments in the front and rear ends while the swap stations are capable of replacing the batteries in less than five minutes. The company stated that quick swapping results in shorter fleet’s idle time, allows for use of smaller batteries and decreases the vehicle’s cost and weight.

The evolution’s second wave

The project is a clear indication that the use cases of the well-known car battery swap players, Californian Ample and Chinese Nio, went viral, heralding the swapping technology is back in the saddle again after the failure in the early 2010s. Back then, the news of Tesla abandoning its swap project as well as the failure of the Israeli start-up BetterPlace, that cost its investors $850M, made many pessimistic about the future of battery swapping. Some of the experts went as far as denouncing it as a technical and market dead-end.

However, the battery swapping market is now warming up in the second wave of enthusiasm. A 2021 market report by US-based analyst Guidehouse Insights estimates that the market which, currently, is just under $1Bn, will annually expand by 45% to reach $28Bn by 2030, including both the sales of battery swap station equipment and the revenues from service subscriptions for the end users. The bulk of this growth is concentrated in the Chinese market, said Ryan Citron, senior research analyst at the analyst, with roughly 17,000 swapping points of the globally total 22,000. The latter number is set to reach 454,000 points in ten years.

The car battery swapping market lags behind the light EVs such as seated e-scooters with only Ample and Nio present in the market. “It’s a little more challenging for the cars because of the battery size and weight issues,” Citron said. However, it’s accelerating. These days, Nio is expanding its service model to Norway and Ample to NYC and Japan.

Much has changed since the 2010s: the cost of batteries has drastically reduced and the population of BEVs is a lot more dense. “There actually weren’t many EV owners back then so there were few users that could actually use the swapping networks,” said Citron. The technology has also improved, playing a role in the resurgence. “In the light EV segment, a swap takes under 30 seconds for the most suppliers. The analytics technology has also been improved quite a bit. Companies are using things like AI to understand where to put their next swapping point based on the demand and population density.”

In Russia, state-owned technical regulator Central Scientific Research Automobile and Automotive Engines Institute (NAMI) is studying the swapping technology’s potential. Its director of IT and AI systems Denis Endachev said that a recent research has proved feasibility of doing a swap in four to five minutes, providing a viable alternative to super-fast charging.

Slow down, get unified

The return of interest to battery swapping was pre-defined by the technical challenges in the fast charging. At a fast-charging point, drivers can replenish 80% of their battery’s charge in around 40 minutes – too long if compared to refueling with gasoline. “It’s also well-accepted in the industry that super-fast charging deteriorates your battery much more quickly,” said Citron. “Although it’s not talked about much, the super-fast chargers also have a strong impact on the electricity grid because they draw huge amounts of power at any given time, whereas the battery swapping stations can slowly charge the batteries when the electricity demand and prices are low.”

However, battery swapping has not come free of strong concerns by the consumers. Incompatibility is the most serious obstacle. “It is unlikely that automakers agree on a unified standard of the battery cell design,” said Nikolay Lobanov, founder of consultancy firm Lobanov-Logist. He believed that swapping makes sense only in closed-facility logistics at manufacturing sites, warehouses and such. “To swap batteries outside of closed facilities, a complicated and expensive infrastructure must be deployed with unpredictable internal rate of return and payback period. Besides, the battery design evolves so quickly and deep that the infrastructure would hardly keep up with the pace of this evolution.”

In this relation, the use cases of the vertically integrated Nio or SberAutoTech who supply both the vehicles and the swapping modules, can beat the path for the others. Citron said: “Eventually, the innovations around batteries are going to diminish and the vehicles’ fits and battery designs will more closely resemble each other. At that point, somewhere around 2030, it’ll be a lot easier for a battery design standard to emerge.”