China is an early leader in the adoption of battery swapping technology and the Battery-as-a-Service (BaaS) business model, thanks to policy support and the success of some early entrants such as Nio, BAIC and Aulton.
The latest Strategy Analytics Electric Vehicles Service (EVS) report, The Rising Battery Swapping Market in China analyzes the Chinese battery swapping market and notes that different players from diverse backgrounds are coming together in the development and exploitation of the battery swapping business model and its opportunities.
The report said battery swapping technology is emerging as an alternative to battery charging infrastructure provisioning a BEV driver with a fully charged battery in a time that is comparable with refueling a combustion vehicle.
Separating the battery from the vehicle helps to lower the upfront cost of BEVs and enables centralized battery charging and management, smoothing demand from the power grid, increasing the lifespan of battery packs, and offering a ready source for the future recycling.
Apart from the successful early entrants, including OEMs and station operators such as Nio, BAIC and Aulton, many new entrants are also making material investments in the battery swapping business, varying from energy providers to battery manufacturer.
High cost of building and operating a swap station and difficulty in sharing swap stations across OEMs impose high risks on the commercialization of battery swapping.
“The improvements in charging and wireless charging technologies and decreasing battery prices could also obviate the current advantages of battery swapping technology,” Julia An, report author and industry analyst in the EVS Service, said.
Strong policy support, OEM commitments, and standardization will allow battery swapping to serve as a complementary approach to fast charging networks in China, said Asif Anwar, Executive Director |Global Automotive Practice (GAP).