Inside China’s electric drive for swappable car batteries

A year ago Tesla dismissed the alternative route of electric car battery swapping as “problematic and not suitable for widespread use”. Beijing seems to disagree.

In fact, China has been pushing hard for swappable batteries for electric vehicles (EVs) to complement regular vehicle charging, with the government throwing its weight behind a number of companies pushing the technology.

The four companies – automakers Nio and Geely, battery swap developer Aulton and state-owned oil producer Sinopec – say they plan to install a total of 24,000 swap stations nationwide by 2025, up from about 1,400 today.

Battery swapping allows drivers to quickly replace an empty pack with a fully charged pack, rather than plugging the vehicle into a charging point. Swapping could help ease the growing strain on the power grid as millions of drivers juice up, yet experts caution that it can only happen on a large scale when batteries become industry-wide standardized.

If China succeeds in making large-scale swapping a success, however, this change could undermine the business models of global brands such as Tesla, Volkswagen And General MotorsThose whose EVs are designed and powered for their own proprietary batteries and, in Tesla’s case, have their own charging network.

Even a minor change in fortunes in the country could have significant consequences for these carmakers, whose future depends on their success in the world’s largest car market.

The Chinese swapping plans, announced piecemeal in recent weeks and months but not widely known outside the domestic auto sector, are part of Beijing’s broader plan to make 25 percent of car sales completely electric by 2025. , or on a current basis there are over 6 million passenger vehicles. Forecast. Estimates vary widely as to how many will have swappable batteries.

The Ministry of Industry and Information (MIIT), a major proponent of battery swapping, did not immediately respond to a request for further comment about China’s battery swapping strategy.

In addition, big Chinese players are also looking overseas.

Ningde-based CATL (Contemporary Amperex Technology Company), the world’s largest battery maker, told Reuters it was developing swapping services not only for China, but “to meet demand from global markets”.

“We are accumulating experience in the Chinese market as well as communicating closely with foreign partners. You will receive more concrete information soon,” said CATL, which accounts for half of China’s market and more than 30 percent of batteries. Uses cells. in EVs globally.

The company’s North American head Ganesh Iyer said NIO, one of China’s top EV makers, plans to offer battery-swapping services to US customers by 2025. It has over 800 swap stations in China and has established its first station in Europe.

never gonna happen

Such plans clash with views expressed by global EV pioneer and leader Tesla in March 2021, when it dismissed the feasibility of large-scale battery swapping in China. It tested the swap in the United States years ago and was abandoned.

Industry executives are divided about whether China’s push could offset the reluctance of European and American automakers to abandon their own battery designs and adopt standardized ones.

“You’ll never see a carmaker agree to a swappable battery,” said Andy Palmer, former Aston Martin CEO and currently head of EV maker Switch Mobility.

John Holland, commercial director for wireless EV charging company Momentum Dynamics for Europe and the Middle East, said the convergence on batteries posed a crisis for automakers.

“Then how do you differentiate your product?”

Tesla, GM and Volkswagen say they are not exploring battery swapping just yet.

A GM spokesman told Reuters that swappable batteries “are not currently part of our strategy.”

A VW spokesperson said that the company had originally considered swapping batteries to avoid waiting times at charging stations, but advances in fast charging and the low cost of non-swappable batteries forced it to focus on the latter. inspired.

“Nevertheless, our strategists closely monitor and evaluate the competitive environment and all developments in this sector,” said the German carmaker.

A Tesla spokesperson did not immediately respond to a request for comment.

Both swapping and regular grid-charging have critics and cheerleaders in the rapidly evolving auto tech sector.

The ease of exchanging batteries in e-scooters has been demonstrated in Asia and Europe, but the challenge is to adopt the technology for larger and more complex cars, trucks and vans. Watch the accompanying short story:

Concerns about the length of the swapping time have also faded, with Nio saying it has automated the process so it takes up to 90 seconds.

Yet the more familiar grid-charging side is a big start, and bolstered by the fact that there are already billions of dollars worth of charging infrastructure built up globally.

Automakers are also rolling out EVs with better batteries that claim longer range and shorter charge times, which could make swapping obsolete.

biggest game in town

In China, MIIT last year issued the global auto industry’s first benchmark for swapping technology. They went into effect in November, specifying safety requirements, test methods and inspection regulations for EVs with swappable batteries.

The ministry aims to have a total of over 1,000 battery-swappable vehicles and over 1,000 swap stations in 11 cities by 2023; Stations in larger cities will accommodate both passenger and commercial vehicles, while outlying provincial cities will focus on electric heavy-duty trucks.

Yet a key uncertainty to China’s ambitions is whether enough carmakers adopt standardized batteries, an obstacle that has stymied battery swapping efforts in the past decade – yet, if overcome, it will. technology to a viable scale. Read a brief history of swappable batteries:

There’s still a long way to go. Even the swapping option offered by Nio to customers uses the company’s own batteries, thus limiting the service to people driving Nio cars equipped with company-owned batteries.

CATL, which helped Nio develop swappable batteries, has signed up China’s FAW Motor as the first customer for its new Evogo battery swapping service and hopes to expand the service to other Chinese automakers.

CATL wants domestic companies to accept its standard battery design so that its stations can serve multiple brands of models, according to a person close to the company, who declined to be named due to commercial sensitivity, adding that more Car brands hope to adopt their standardized designs. ,

The company is “the biggest game in town” for EV batteries, said Tu Le, managing director of China Auto Insights.

“They can offer a larger footprint for swapping stations and a lower cost to use those stations,” he said.

Meanwhile, among the Chinese companies that are building the swap station network, Shanghai-based Alton New Energy Automotive Technology has said it is working with automakers to develop standardized batteries, and with Sinopec by 2030. As of 2011, China is working to set up stations at 30,000 Sinopec gas stations.

Alton did not respond to a request for comment.

magic in america

While international carmakers may oppose swappable batteries, they are dependent on Chinese sales for their costly transition to electricity and will have little choice but to adapt to the market, according to many industry experts.

Also, if Beijing eventually mandates interchangeable batteries “and starts saying, ‘Well, you’re only allowed to produce one car that meets the standard’… You have to comply to stay in business”, says John Helveston, an assistant professor at George Washington University’s School of Engineering.

Some advocates of the swap are looking beyond China.

“Battery swapping is too convenient, too economical, and very logical to not happen at large in Europe and the United States,” said Levi Tillman, head of policy and international business at San Francisco-based battery swap startup Ample.

“It’s a magical thought to imagine that this is a uniquely Chinese phenomenon,” he said.

Ample, one of only a few developers to swap batteries outside China, has raised $275 million from investors that include energy companies Shell, Repsol and Enos, raising its valuation to $1 billion.

It is running a pilot program with Uber and car rental startup Sally, and says it is collaborating with a number of unnamed automakers.

“With a relatively small number of vehicles that are heavily used, we can profitably deploy and operate battery swap systems,” Tillman said. “So fleets are a major target for us.”

© Thomson Reuters 2022

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