• Electric Vehicles
  • Electric Vehicle Charging Infrastructure
  • Battery Energy Storage
  • Policy and Regulation
  • Asia Pacific

China's Battery Swap Trend Is Way Ahead

Scott Shepard
Oct 06, 2020

Guidehouse Insights

In late September 2020, Chinese automaker Geely Auto Group introduced its battery swap station and plans to distribute stations across China. The month prior, China approved the country’s first safety standard for battery swapping as recommended by battery swap pioneers NIO and Beijing Electric Vehicle (BJEV) and the China Automotive Technology and Research Center. Two other Chinese automakers besides Geely are also intending to deploy battery swap solutions. As three companies (NIO, BJEV, and Geely) now make a trend, the Chinese EV industry is cementing a leadership position in the future of the global EV market.

Battery Swapping Is the Future

Battery swapping overcomes key challenges for EV markets and enables numerous EV ecosystem optimizations. The stations developed by NIO, BJEV, and now Geely boast a swap in as little as 5 minutes. This interval is faster than what a petrol pump may deliver to an empty gas tank.

Besides obvious advantages for the customer, battery swapping has big positives for operators. For example, swapping greatly increases the number of EVs that can be serviced per square meter. Geely estimates that its station (made up of 39 charging bins) could handle 1,000 swaps a day on 126 square meters, roughly equivalent to 10 parking spaces. For comparison’s sake, half of this capacity could not be delivered with 10 ultrafast chargers operating full-time for 24 hours.

Another optimization can be found for grid operators. Swap stations are large energy storage solutions that could be tapped for a variety of grid needs, such as shifting peak loads to absorb renewables generation or using stations as an asset for frequency regulation. These opportunities exist with conventional EV technologies but not with on demand fast charging services that battery swapping is best positioned to displace.

Battery swapping also has positive implications for battery durability and offtake. The battery swap service gives operators better ability to optimize charging for durability and better visibility to identify packs, modules, or cells ready to move on to the next use or be recycled into the battery manufacturing supply chain. Battery swapping would consolidate EV battery waste streams around swap station operators, enabling scale and reducing costs for the nascent EV battery reuse and recycle industry.

Where Is the West?

Despite the benefits listed above, the EV industry outside of China wrote off battery swapping when Better Place failed; it hasn't seriously entertained the concept since. At the time, rejection of the concept made sense—EV makers were determining how to integrate battery and EV, and few were interested in tying their technologies to the swap architectures of a third-party player like Better Place. However, now, the way batteries fit into the EV is far clearer with the industry consensus solidifying around the skateboard chassis.

Emergence of the skateboard chassis does not mean that EV markets are ready for another Better Place. Only services from EV makers akin to the Tesla Supercharger network model can work at this stage. However, aside from possible stealth operations, battery swapping outside of China is nonexistent. This fact is a symptom of having comparatively weak EV adoption policies that slow the development cycle of technological innovation and standard setting. China has been ahead for some time, evidenced not only by the battery swapping safety standard but also by leading standards for EV battery safety and recycling. If foreign markets do not catch up, they will be ripe for disruption from leading Chinese EV makers.