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A number of days in the past I revealed a response to a set of reactions to an article on the plummeting price of batteries and the way they allow megawatt scale charging. What had been the reactions about? Battery swapping, which many individuals appear to assume is the bees knees and ought to be in every single place. I disagreed, and other people willingly shared knowledge which challenged my argument, for which I thank them. It doesn’t, nonetheless, change my opinion a lot, at the least not but.
What’s my place on battery swapping? It’s four-fold. First, if a battery will be swapped by hand by an individual with poor higher physique energy, assume two- and three-wheelers batteries, there’s potential for battery swapping, nevertheless it’s removed from a slam dunk. Second, if batteries are in normal transport containers and will be moved with normal transshipment terminal gear like cranes, attain stackers and straddle carriers, then there’s a powerful alternative.
Third, the for autos in between, a bunch of circumstances must exist for battery swapping to make sense. It must be a fleet. The fleet must be homogenous, with a set of near an identical autos from the identical producers. The fleet has to have very heavy operational necessities. The fleet has to work inside a fairly tight geographical boundary or have very well-known routes. The fleet has to have the ability to be de-risked from vendor lock-in. The volumes must be very excessive in order that the price of an automatic battery swapping and charging facility, usually over one million USD, in addition to the entire further batteries will be amortized throughout a really massive set of swaps per yr.
Lastly, the marketplace for autos with swappable batteries must be very huge and dominated by a number of main car producers to accommodate the engineering of swappable batteries and automatic swapping techniques.
An instance are cement vehicles in a big city space, the place a set of an identical electrical vehicles are working from the concrete batching plant to work websites within the metropolis, driving to the websites, pouring their concrete and returning for a contemporary batch a number of instances per day, with a number of shifts per day. That is largely for Asian building, which I do know from private expertise is a 24/7/365 operation having watched an outdated sports activities stadium disappear after which a brand new, a lot greater facility seem from my apartment home windows in Singapore over a yr or so.
Beijing, for instance, has roughly 9,000 cement vehicles working out of what I estimate are 30 to 40 concrete batching crops. Beiben is one in all greatest suppliers of cement vehicles, together with electrical cement vehicles and battery swapping techniques for them.
One other instance is forklifts, the place main 24/7 distribution facilities like a lot of Amazon’s might need as much as 200 forklifts within the facility, all in pretty fixed use.
There may be potential for this with drayage vehicles within the greatest container ports, those that run 24/7, with containers continuously shifting from distribution facilities to the port and vice versa. As famous within the article on swapping, US ports don’t run 24/7, however 21/5 for essentially the most half, in contrast to many of the remainder of the world. There may be extra potential for drayage swapping globally.
Nevertheless, there isn’t a lot potential for port floor autos as a result of there are solely about 120,000 of them within the 900 or so huge container ports on the planet, there are three or 4 very in a different way formed and sized autos, and there are a bunch of various producers.
That is a part of one of many knowledge factors individuals who love swapping dropped at my consideration, that nearly 50% of China’s electrical truck gross sales in 2022 had been swap succesful. Most of them referenced an article which extolled this as the way forward for all electrical autos, however no person seemed on the ICCT report which the article was primarily based on. That report by China-based ICCT workers visited a variety of swapping stations, compiled the statistics and reported on governmental efforts within the area. It’s clear that whereas nearly half of autos had been offered with the potential of swapping their batteries, the quantity that had been really swapping batteries was a lot smaller.
And because the report additionally says:
These swap-capable electrical vehicles are primarily used for short-haul purposes at ports, mining websites, and in city logistics.
In different phrases, the forms of utilization patterns I’ve outlined the place it is smart.
This can be a Chinese language governmental initiative in sure heavy car segments the place it’s advantageous, doubtless following the circumstances above, nevertheless it’s hindered by the entire lack of standardization throughout producers, one of many circumstances of success famous, and by the excessive price of automated swapping stations. As soon as once more, this speaks to fleet homogeneity throughout car producer and car kind.
In the meantime, in Australia an organization has a horrible system that entails a human forklift operator swapping batteries on a number of vehicles. That’s not scalable and even remotely attention-grabbing besides for instance that some folks will strive something. It gained’t finish nicely, and gained’t unfold.
On the different finish of the dimensions, there are two- and three-wheelers. Gogoro was identified to me once more (and time and again) as if I could be unaware of it. The factor is, Gogoro is a pump and dump SPAC play whose inventory is off 85% from the pumped peak and which misplaced US$70 million final yr. The one factor most SPAC performs are good at is the hype a part of it, so lots of people have heard of it and assume it’s successful. Not a lot.
Nevertheless, at a current seminar in my India sequence the place I used to be talking with assembled electrical utilities sources about storage, I spoke concerning the decrease advantage of car to grid vs demand administration of charged batteries, and referenced the numerous alternatives offered by filth low-cost batteries by way of buffering electrical energy at truck stops. This triggered a dialogue of battery swapping in India, the place the Indian Good Grid Discussion board beneath whose auspices the seminar sequence is continuing had carried out a research of the topic for two- and three-wheelers and beneficial that the federal government require that electrical ones be offered with out batteries to make the acquisition worth lots cheaper.
This labored out pretty nicely and each village now has two or three swapping stations per the dialogue. It’s hindered by a scarcity of standardization throughout distributors, one of many huge challenges of swapping options, nevertheless it muddles by. Nevertheless, innumerable non-swapping two- and three-wheelers have been hand constructed or inbuilt small batches by work outlets as a result of it’s so low-cost and simple to do, and these are additionally a continuing presence on the streets of India. Solely about 10% to fifteen% of two-wheelers have swappable batteries, with a better share amongst three-wheelers, the mixed pickup truck, supply truck and taxicab of a whole lot of Indian cities.
At this scale, frail human arms can pull a easy battery with no thermal administration techniques out of a scooter and drop it right into a charging rack, after which reverse the method with a charged battery. As soon as once more, numbers and 0 automation make this viable.
Then there’s the outlier within the center, NIO. It sells eight fashions of vehicles and SUVs, all with battery swapping in addition to the power to plug in to cost. They’ve offered nearly 500,000 autos. In keeping with reviews, about 60% of householders use swapping at the least often, though precise utilization statistics are fairly scant. The general public knowledge is a factoid launched by the corporate, not a set of utilization statistics, which is kind of cheap. They’ve round 2,400 swapping stations, nearly solely in China.
They do promote their vehicles in 13 different international locations, and in Europe have some swapping stations, in Norway (10), Germany (9), the Netherlands (9), Sweden (8), and Denmark (1). NIO additionally operates round 2,179 supercharging stations in China, providing 10,028 chargers. In the meantime there are about 470,000 high-speed chargers among the many roughly 2.1 million public chargers within the nation. There are 100,000 fuel stations within the nation as nicely.
In different phrases, in each market that NIO is in, high-speed charging and different charging approaches dominate, together with chargers it operates itself in China. The ratios make it clear that battery swapping doesn’t remotely dominate NIO proprietor patterns and is a comfort that simply over half of householders make the most of when it’s handy and on their approach someplace.
For NIO house owners in China, the price of battery swapping is included in some subscription packages. Usually, a subscription that features six swaps monthly for a 70.0-kWh battery pack prices about $142 monthly. In Europe, the price construction features a flat charge plus a per-kWh cost. As of the most recent accessible info, NIO prices a flat charge of €10 per swap, plus €0.20 per kWh. For instance, a 100 kWh battery swap would price roughly €30 in whole. That is really cheaper than high-speed charging in Europe it seems, so clearly NIO is pricing the price of swapping considerably into the worth of buying the car, together with the chance of batteries simply going stroll about.
As with something like this, there have been technical glitches, mismatches of accessible charged batteries to vehicles wanting them and queues, partly as a result of the area they occupy may home from 6 to twenty quick chargers as an alternative. Additionally they require much more upkeep than a quick charger which generally has no shifting components, so common and unscheduled upkeep is larger, though most likely nonetheless decrease than for hydrogen refueling stations. Reviews seem to point NIO proprietor satisfaction and comparatively good service, and it’s not like electrical car charging that’s not from Tesla, a few European distributors and lots of Chinese language distributors has been extremely dependable to date.
Personally, I believe NIO goes to surrender on this ultimately, however maybe they’ll keep it as a differentiator. They promote high-end vehicles to well-heeled people who undoubtedly take into account their time invaluable, whether or not it’s or not. But it surely’s not like they’re being profitable doing it. Over the previous 4 years, NIO has reported web losses of $2.98 billion in 2023, $2.07 billion in 2022, $813 million in 2021, and $1.61 billion in 2020, about 75% of their present market capitalization. NIO is ten years outdated, and Tesla began turning a revenue in its tenth yr, by comparability. NIO’s losses are growing not lowering. Listed here are the losses per car of the equal 4 years in NIO and Tesla over the 4 equal years of their lifespan.
| 12 months | NIO Losses per Automobile (USD) | Tesla Losses per Automobile (USD) |
|---|---|---|
| 2020 | 36,799 | 101,600 (2011) |
| 2021 | 8,890 | 127,742 (2012) |
| 2022 | 17,063 | 3,319 (2013) |
| 2023 | 22,276 | 9,289 (2014) |
Curiously, Tesla’s losses per car had been a lot larger however radically diminishing. NIO’s dropped and had been more and more considerably. Not remotely a agency indicator, however I think it’s indicative.
Sharp eyes could have seen I promised 4 circumstances of success and solely said three. A few of them will go away feedback, not having the endurance to learn this far. The fourth pre-condition, at the least to date exterior of the massive distribution middle forklift area, is a governmental initiative to drive battery swapping. That’s true in India and true in China. Will it stay true? It’s exhausting to say. China famously crosses the river by feeling for stones with its toes with every step, the extension being that they’ve an terrible lot of toes attempting to cross an terrible lot of rivers, so the successes are rather more apparent than the failures (comparable to hydrogen for floor transportation). It’s very exhausting for personal corporations to make battery swapping make financial sense.
As for truck stops on highways? Not an opportunity they’ll be seeing battery swapping techniques in my view. There’s zero consistency of car varieties, no enterprise mannequin for sharing batteries and a number of different issues. Delivering electrical energy by chargers is totally cheap given utilization patterns.
Does this imply that battery swapping gained’t unfold greater than I take into account doubtless? After all not. As I often say, something China does at scale is kind of prone to be the reply in a whole lot of different international locations as nicely. That just about half of electrical vehicles in China had been offered with swap-capable batteries, even when they aren’t utilizing that functionality, makes me sit up and take discover. If knowledge exhibits that my perspective is incorrect, I modify my thoughts. At current I believe my tackle swapping — which hasn’t modified because the first swapping article — is extra doubtless appropriate, but when shifting huge hunks of metallic containing electrons dominates much more markets than simply shifting electrons, I’ll be shocked, however lean into it.
