How China is driving battery swapping as a service in the EV market

Electric vehicles (EVs) have become a cornerstone of the global shift toward sustainability, and the demand for efficient and convenient charging solutions is rising as a result. Battery swapping, a service that allows EV drivers to exchange depleted batteries for fully charged ones in minutes, offers a solution to charging wait times.

While battery swapping has been explored as a concept for years, it is now gaining momentum, particularly in key markets like China, where government policies and automaker investments are driving its growth.

Here, we explore the emergence of battery swapping as a service and how it may reshape the future of electric mobility.

Battery swapping versus traditional charging

The appeal of battery swapping lies in its ability to address many of the pain points that come with conventional charging methods. While traditional EV charging can take anywhere from 30 minutes to several hours, depending on the type of charger, battery swapping can be completed in under five minutes. This rapid turnaround is crucial in high-traffic areas and for commercial fleets, where minimising downtime is essential.

Another key feature of battery swapping is the separation of battery ownership from vehicle ownership. It allows drivers to purchase EVs without bearing the full cost of the battery, which is often one of the most expensive components.

Additionally, it encourages battery standardisation and maintenance, ensuring that the batteries used are well-maintained and up to date. All battery packs used for swapping are uniformly stored and charged at a central location before being transported to various regional swapping stations for electric vehicles to replace their batteries. The swapping stations use slow charging to recharge the battery packs, which helps extend the lifecycle of the power batteries. Retired power batteries are collected by battery recycling companies, with batteries that meet the performance requirements for energy storage systems being used there.

For commercial fleets and high-mileage drivers, battery swapping offers an efficient, cost-effective solution that significantly reduces downtime. Additionally, the ability to decouple the battery from the vehicle is appealing for consumers who want to lower the cost of EV ownership. By contrast, traditional EV charging requires extensive infrastructure, longer wait times, and higher upfront costs for consumers.

As the technology matures and more automakers embrace the concept, battery swapping could become a viable alternative to traditional charging methods in urban areas worldwide.

The rise of battery swapping in China

China, the world’s largest EV market, has positioned itself as the leader in the development and deployment of battery swapping technology. The country’s target is to exceed 16,000 battery swap stations by 2025, with rapid growth continuing beyond that.

Supported by the government’s focus on reducing carbon emissions and fostering innovation in the automotive industry, battery swapping has gained traction in several Chinese cities, including Beijing, Shanghai, and Guangzhou.

Government subsidies and pilot programs have been crucial in scaling this technology. These policies encourage the construction of infrastructure and provide incentives to automakers willing to invest in the development of battery swapping-compatible EVs.

Major players and investments in battery swapping

The growth of battery swapping in China has attracted significant investments from both automakers and third-party companies. One of the most notable pioneers in this space is Nio, a Chinese electric car manufacturer, that has made battery swapping a cornerstone of its business model. As of June 2024, Nio had installed 2,432 power swap stations in China, including 804 swap stations based on highways. This represents the largest battery swapping network in China, with the company aiming to have 4,000 battery swap stations globally by 2025.

Other Chinese automakers are also getting involved. Geely, one of China’s largest car manufacturers, has launched Caocao Mobility to integrate battery swapping into its ride-hailing services. Similarly, BAIC is working with Aulton New Energy, a company specialising in swapping solutions, to build a network of stations for commercial vehicles, particularly taxis.

CATL, the world’s largest EV battery maker, has introduced its own battery-swapping system called EVOGO. This modular solution allows users to swap individual battery blocks, giving them flexibility based on their driving needs. CATL is also targeting 10,000 battery swapping stations by 2030​.

Challenges to adoption

Despite its advantages, battery swapping faces several challenges that need to be addressed before it can be widely adopted. One of the main obstacles is battery standardisation. With different automakers using different battery chemistries and sizes, creating a universal battery swap system remains difficult.

Another challenge is the high initial cost of building and maintaining the necessary infrastructure, which requires collaboration between automakers, energy providers, and government agencies. However, since November 2023, Nio has partnered with four Chinese automakers (Changan, Geeley, Chery and GAC) in order to explore battery standardisation and the expansion of its network.

Market growth and future projections

China’s rapid adoption of battery swapping has set a strong precedent for the global market. By 2030, some industry experts predict that battery swapping could account for up to 10% of the global EV market, with hundreds of millions of battery swaps annually.

In addition to the thousands of stations being constructed in China, other countries are beginning to explore similar initiatives. Germany, Israel, and India are considering battery swapping as part of their EV infrastructure strategy, while Norway has already seen Nio bring its swapping technology to the market.

So far, the application scenarios for battery swapping in the electric vehicle market primarily focus on commercial vehicles that have medium to high-frequency battery swapping needs, such as ride-hailing cars, taxis, and heavy-duty trucks. The private-use market is still developing and have not yet achieved overall breakeven conditions due to issues such as high initial investment, lack of standardisation and low equipment utilisation.

Bo Yu, Country Manager for JATO China commented “ The continuous advancement of battery swapping technology and the promotion of standardisation will provide a more solid foundation for the electrification transformation in the market. As the technology matures and is applied on a larger scale, the user experience of electric vehicles will be further enhanced.”

Battery swapping has the potential to revolutionize the EV industry, offering a faster, more convenient, and flexible alternative to traditional charging. China’s push to develop battery-swapping infrastructure has positioned it as a global leader in this space, and other countries are beginning to take notice. As automakers, technology providers, and policymakers work together to overcome the challenges, battery swapping may soon become a common feature in cities worldwide, reshaping the future of electric mobility.

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