Author: Li Yuanyuan, Dian Guan
“Swapping batteries is a good energy supplement mode in some specific fields, such as taxis, but we firmly believe that charging is the best energy supplement mode for mass-market electric vehicles,” said Tao Lin, Vice President of Tesla’s External Affairs.
“Swappable passenger cars are more flexible using battery swapping than operating buses, taxis, and freight transport,” said Shen Fei, Vice President of NIO Auto. Recently, NIO executives’ response to Tesla China executives’ views on battery swapping has once again provoked heated discussions among the industry and consumers about the charging and swapping modes of electric vehicles.
Tesla represents the supporters of high-power fast charging (Supercharging) mode; NIO is a supporter of battery swapping mode, or using NIO’s own words, they support the “rechargeable, swappable, and upgradable” supplement system.
In addition to high-power fast charging and battery swapping, there is another representative of charging infrastructure – Tesla’s charging network. These three energy supplement modes have been playing, learning from each other, and accumulating various practical experience and exposing their respective weaknesses during the development process of electric vehicles over the past decade.
Although the representative companies of the three modes have dissed the other two sides in the past, it is too arbitrary to generalize which one is superior, whether it is the battle of electric vehicle charging modes and battery swapping, or the competition between high-power and battery swapping.
The view of “Electric Vehicle Observer” is that currently, battery swapping mode is more suitable for high-end and commercial models; high-power fast charging should start from the high-end market, and whether it can be popularized in the future still needs to be determined; Tesla’s charging network, which can be charged at any time, is beautiful in vision, but it also requires more time and samples to verify.
Who is faster-from Tesla to give up battery swapping
The debate between NIO and Tesla executives on charging and battery swapping began on February 26th when Tesla’s business scope change information added “sales of new energy vehicle battery swapping facilities”.
There were soon speculations online about whether Tesla would restart its battery swapping business. A few days later, Tao Lin responded on her personal Weibo account, “As early as 2013, Tesla tried battery swapping. Swapping is a good energy supplement mode in some specific fields, such as taxis and buses, but we firmly believe that charging mode is the best energy supplement mode for mass-market electric vehicles.”
“Battery swapping facilities mainly serve public transportation, and high-power fast charging is more convenient and stable for mass-market use,” she added.
Tao Lin’s comments limiting battery swapping mode to the “public transportation” industry have made NIO, who actively promotes battery swapping, unable to sit still.Shen Fei, the Senior Director of Communications at WeiLai, and Ma Lin, the Director of Communications at Tesla, both retweeted Tao Lin’s post on Weibo and explained the different perspectives of WeiLai and Tesla on “battery swapping” and “charger upgrade”.
Shen Fei stated, “When charging and swapping stations are running at full capacity, it is not just charging speed that matters, but the power grid capacity. Passenger cars that can be charged and swapped are more flexible than operating rental buses and cargo trucks. Swapping stations can be deployed in more locations where users are more concentrated, or in high-traffic service areas with more urgent needs. Other places can just be charged, which improves system efficiency.”
Short charging time is the market driver for high-power fast charging, which charges a battery in half or one-sixth the time of a typical 60 kW DC fast charger. The debate between WeiLai and Tesla focuses on whether battery swapping can achieve the same charging speed as high-power charging.
Tao Lin’s example is Tesla’s V3 Supercharging station, which can recharge up to 250 kilometers of range in 15 minutes. This suggests that private car battery swapping cannot be as fast, especially when the swapping station is at full capacity.
In fact, in 2013 when Tesla CEO Elon Musk introduced the swapping model in the US, his promotion claimed “swapping is faster than refueling”, and he demonstrated a swap that only took 90 seconds, which was faster than refueling a gasoline-powered car.
Later, Tesla abandoned the swapping station construction plan due to high cost and few users, not because it was not convenient when at full capacity, as Tao Lin said.
Of course, in areas where the utilization rate of battery swapping stations is high, efficiency is limited when the stations are at full capacity. For instance, some taxi drivers in Xiamen have reported queuing during peak swapping hours, while in Haikou, some WeiLai swapping stations swap batteries more than 100 times a day, cycling 20 times a day for five batteries. Sometimes, a battery is swapped before it is fully charged, which affects the efficiency of battery swapping.
To address this, battery swapping operator Autonew Energy has accelerated the deployment of swapping stations, increased power capacity, and met the demand for swapping.
On the other hand, the newest, fourth-generation swapping station from Autonew has doubled swapping efficiency compared to the previous product, greatly improving the poor user experience caused by full capacity.
On WeiLai’s side, the battery reserve of a single second-generation swapping station has increased to 13, with the daily swapping capacity reaching 312, which greatly enhances the efficiency, cost, and user experience of battery swapping.In the field of private cars, the problem of low charging efficiency when battery swapping stations are at full capacity can be alleviated to some extent. However, compared with the private car sector, the battery swapping mode has been applied for a longer time and has received more comprehensive verification in the operation of vehicles, including taxis, freight vehicles, and electric trucks. Academician Ouyang Minggao of the Chinese Academy of Sciences has also expressed that battery swapping is an alternative for passenger cars but a necessary option for trucks. By adopting the battery swapping mode, there is no need to buy batteries when purchasing a vehicle, and new energy vehicles are priced similarly to traditional fuel vehicles. Battery swapping takes only five minutes, which is as fast as refueling. Therefore, battery swapping trucks can compete with diesel trucks in the commercial market. Ma Lin also emphasized on Weibo that rechargeable, replaceable, and upgradable features are all scenarios for providing users with all-round energy replenishment services as a high-end brand of NIO.
As for safety, the safety of several charging and battery swapping modes is undoubtedly the most concerned issue for users. The public’s first concern may be high-power and fast charging–is this method of energy replenishment that can refill 80% of the battery in just over 10 minutes safe? Will it reduce battery life? In response, Liu Yongdong, the director of the standardization management center of China Electric Power Enterprise Federation and secretary general of the technical committee for standardization of electric vehicle charging facilities in the energy industry, stated that high-power and fast charging has the same safety standards as ordinary charging. When the battery reaches a higher temperature, it must reduce power and current. Moreover, high-power charging is not always high power from 0% to 100%. After reaching a certain proportion, the charging enters a trickle mode. In the application of high-power technology, companies balance high energy density with charging speed. Therefore, high-power charging will not cause significant damage to the battery.
Relatively speaking, users may find the safety of battery swapping station more acceptable. High safety is an important basis for supporting battery swapping. As Wang Zidong, the vice secretary-general of the China Automotive Power Battery Innovation and Development Alliance, said, the route of charging has caused a series of problems in recent years, and battery swapping is a better solution. One of the reasons is that compared with charging at charging stations, power batteries are controllable when charging at battery swapping stations, which can improve safety.
However, there are also doubts about the safety of battery swapping, especially from Yu Dexiang, the chairman of TELD. In his opinion, if the battery swapping station is charging multiple batteries and one of them explodes, it may cause several dozen batteries in the battery bin to explode at the same time, posing enormous safety risks. Therefore, battery swapping station sites have high requirements for environmental assessments, and it is not allowed to stack a large number of battery packs around residential areas, gas stations, hospitals, and other units, making it impossible to form a convenient battery swapping network. However, according to Lan Zhibo, the vice president of Aoda New Energy, there have been no incidents of combustion in battery swapping vehicles over the past four years, involving nearly 10,000 vehicles serviced by Aoda. As for high-power fast charging, Yu Dexiang is also not optimistic about it.At the 2020 China Electric Vehicle Hundred People Forum, Yu Dexiang stated that high-power charging modes like Tesla’s Supercharger cannot be widely promoted, because the larger the power of the charging station, the greater the impact on the power grid, and the more social resources it occupies. However, it serves very few vehicles. Such construction without considering the resources of the power grid wastes significant social resources. Therefore, Yu Dexiang believes that building a charging network is essential to meet the needs of the large-scale development of electric vehicles, improve the utilization rate of electric power resources, and ensure the safety of charging, which is also the charging ecosystem that Techrules is building.
Regarding the question of whether high-power fast charging will increase the pressure on the power grid, Wu Bin, Director of the Marketing Department of State Grid Corporation of China, has stated that high-power charging stations must be equipped with dedicated transformers and applied for capacity. If the grid gives capacity to the operator, it will not cause any problems to the power grid itself.
In fact, State Grid Corporation of China is also actively promoting high-power fast charging station demonstrations because the power grid hopes to concentrate and manage the load, which is easier to plan and coordinate than the dispersed and unclear ones.
Who can profit from it?
Currently, if the planning and layout are reasonable, the design meets safety standards, and sufficient power grid capacity is applied, whether it is battery swapping, ordinary fast charging, or high-power fast charging, their convenience and safety are relatively reliable.
Techrules is currently the largest charging operator in China. Yu Dexiang introduced that Techrules has invested 7 billion yuan in charging infrastructure, with a cumulative loss of 1 billion yuan in the past few years. It has just entered the break-even period of operation. The main reason for the losses is due to investment in charging infrastructure in advance, and low equipment utilization. When electric vehicles develop on a large scale, charging profits are inevitable.
“Techrules can do well because we have chosen the right path, which is to build a charging network, not just charging piles,” he said.
On the other hand, Shao Danwei, chairman of Star Charge, another charging leader, believes that “charging operations are very close to the inflection point. The largest cost of public charging is parking. The real inflection point is the day when high-power charging becomes prevalent.”
However, currently, the electric vehicles that support and promote high-power fast charging are mostly high-end models with large batteries, long endurance, and high prices. Tesla and Porsche have already launched high-voltage platform models, and BMW, Mercedes-Benz, and Audi also have plans. Domestic automakers such as FAW and BAIC have already tested high-voltage platform models.
In addition to long-range electric vehicles, Liu Yongdong believes that industries such as taxis, ride-hailing, and public transportation, which are particularly sensitive to charging time, as well as highways and big cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, where EV owners do not have parking spaces and dedicated charging piles, may also adopt high-power charging.In short, high-power charging “is not a common application, but only in certain scenarios.” It is difficult to determine whether it can really become popular in the mass market.
What about the battery swapping route with great momentum? It is also not easy to achieve profitability.
Currently, the battery swapping model can make money in certain cities. For example, in Xiamen and Guangzhou, the utilization rate of Aodi battery swapping stations has exceeded the profit line of 60%. Bertrand Technology, another leading enterprise in battery swapping, also has its own profitability model.
Bertrand Technology’s revenue and expenditure calculation for battery swapping stations.
“Observer of Electric Vehicles” made this chart based on interviews.
However, the profitability of Aodi is not generally applicable. In other areas where the utilization rate of battery swapping stations is low, it is still not profitable. Bertrand’s business model is logically sound, but it has not been sufficiently verified.
In the field of private cars, NIO has proposed the BaaS service model. Although theoretically it can form a closed loop consisting of NIO, users, and battery asset holders, the value of the entire life cycle of its battery can be fully tapped, making the battery swapping model profitable and sustainable. The road to development still needs to be observed.
Fortunately, compared with Tesla and Better Place’s battery swapping trial years ago, the technology and market environment are much better now. As Li Yujun, the executive vice president of the Beijing Automotive New Energy Engineering Research Institute, said, the battery cost has dropped from 5,000 yuan per degree of electricity to eight or nine hundred yuan now, and the vehicle energy consumption has dropped from 16 degrees per hundred kilometers to 12 degrees or even lower.
“The battery cost is still falling, and energy consumption is also decreasing, which will help improve the economics of battery swapping,” said Li Yujun.
After NIO and Tesla “discussed” on Weibo, Sohu Auto conducted a survey of nearly 100 electric vehicle owners from both brands. Most of the car owners, including Tesla owners, have a relatively high acceptance of the battery swapping model, and NIO owners also basically approve of the battery swapping service.
As Ma Lin said on Weibo, “Whether battery swapping is good or not, users have the most say.”
Not only for battery swapping, but also for ordinary fast charging or high-power fast charging, users will choose the most suitable replenishment method according to their own situation.
Companies need to improve the efficiency and safety of charging and battery swapping, develop a sustainable profitability path, and continuously provide services to users.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.