Can the Growth of EV Battery Swapping in China Overcome Challenges?

My colleague Scott Shepard recently wrote about the growth of battery swapping for EVs in China. He outlined numerous benefits, including rapid turnaround times compared to charging and even refueling internal combustion engines (ICE). However, there are still significant challenges that may limit the market potential for this concept.

Unique Pack Formats

Since the dawn of the modern EV era a decade ago, one thing has remained constant: no two EVs from different manufacturers have interchangeable battery packs. While automakers that have multiple EV nameplates are now designing EVs around common pack designs, you still can’t move a Chevrolet Bolt pack to a Nissan Leaf or a Tesla Model 3.

In China, automakers are operating swap stations specifically for their customers, so a NIO driver can’t get a charged battery at a Geely station. Ideally, drivers would be able to pull into any swap station just as ICE drivers can go to any fuel station. Requiring drivers to go significantly out of their way to a specific station for a battery swap would waste time and energy just as incompatible charging standards do.

Requiring station operators to stock potentially dozens of different pack types would quickly become untenable from a logistics and capital investment standpoint. It would be impractical to use the battery inventory for stationary storage if there are multiple pack types. However, the trend toward EV platform sharing such as Ford using VW’s MEB and Honda adopting GM’s Ultium system could mitigate this problem if the platforms were designed for swapping.

Given that the industry is relatively early in the evolution of EV batteries, chemistries, cell formats, battery management systems, and other key features are still changing at a rapid pace. As such, manufacturers are reluctant to lock themselves into standards prematurely. EVs are also being introduced in many new forms from small crossovers to full-size pickup trucks and cargo vans that limit the ability to standardize the pack format.

Eliminating the Packaging

Another roadblock is the potential elimination of the pack as an entity. Current packs have a hierarchical architecture. Cells are assembled into modules that are loaded into packs, which allows for serviceability and isolation of potential thermal runaway. However, these layers of packaging take up volume. In the consumer electronics industry, replaceable batteries have largely been eliminated as manufacturers have moved to simply sealing cells within the case of laptops and smartphones. This action enables more cell capacity to be installed in the same volume.

At its recent Battery Day event, Tesla announced plans to integrate the battery more tightly into the overall vehicle structure to enable greater energy density. CEO Elon Musk showed a proposal that would eliminate most of the packaging associated with the pack, including the modules. The cells would be bonded to the upper and lower sheets, and the entire battery would become a structural element of the vehicle. This change increases energy density and efficiency by contributing to mass reduction. Even in current traditional pack designs, the packs are frequently used as a structural element, making quick changes less practical.

Battery swapping may prove economically and technically challenging for consumer applications, but it may hold more potential for large fleets that return to base daily. Fleets are more likely to be homogeneous, and the need to tightly integrate is less necessary for applications such as delivery vans or robotaxis. Meanwhile, the operating economics will be more appealing to those users, including the reduced need for fast charging and potential revenue from grid load balancing. However, concerns about vendor lock-in with a specific technology may also limit fleet adoption.