To swap or not to swap… The latest innovation driving the future of transportation is swappable batteries.
If you think the “vehicles” behind electric vehicles (EVs) are driving the future of mobility, you’re already behind the curve. It’s not a question of rethinking the “vehicle”… it’s the “electric” part and HOW we power them.
ON THE UP: Swappable Batteries
Pro-tip: Companies are developing lightweight batteries that allow drivers to swap the battery in their electric vehicles out for a pre-charged battery. To date, there have been hundreds of thousands of battery swaps made across the world, enabling drivers to travel millions of emission free miles.
Swappable batteries aren’t new… you use them for flashlights. Now we see momentum for swappable batteries for EVs starting to pick up as countries like India and China increasingly rely on this technology as they make EVs cheaper and more competitive to gas powered vehicles. The U.S. is behind.
Past attempts for swappable batteries in the US were for consumer vehicles. Swappable batteries have momentum NOW because inventors and investors across the world see the value of the technology for commercial vehicles.
Companies like India’s Sun Mobility and China’s NIO make the case that swappable batteries are best for any commercial vehicle with a circular route — they can easily access a swap station and continue onwards:
- Tuk Tuks (3 wheel vehicles commonly used in India)
- City buses, scooters, taxis / ride share vehicles
- Last mile delivery trucks & cars
- Grocery & food delivery vehicles
Rapid changes to our world are now proving the additional benefits of swappable batteries in commercial EVs:
- Time: Commercial vehicles can’t wait the 1+ hour it typically takes to charge an EV. Swapping is much quicker so they can continue on their way.
- Easy to upgrade: When you have a swappable battery in your vehicle, you can easily start using the latest model. EV’s with built in batteries become outdated as soon as they develop a new battery.
- If you have a Tesla, you are stuck with the battery they gave you at the time.
- Cost efficiency: Swappable batteries can bring down the overall cost of buying and operating electric vehicles. Selling the battery separately from the vehicle brings down the cost by nearly 50%, making electric vehicles much more affordable and accessible. The Indian and Chinese governments are even establishing programs to help subsidize the costs.
- Safety: Swappable battery companies like Sun Mobility monitor the thermal energy in the battery so it doesn’t catch fire (which commonly happens across other EVs with built in batteries).
After being dismissed by Elon Musk and Tesla in 2014, Silicon Valley startup Ample is rethinking swappable batteries and already using them in Ubers in the Bay Area. It’s only a matter of time until they are more ubiquitous in the U.S.
Swappable batteries are here.
Increasingly, innovations coming out of India are the ones to watch. Their use of lightweight, swappable batteries for mass transit is an opportunity to get an early look into the future of transportation and how this will be adopted in the United States and elsewhere.
The technology’s potential impact on mass transit and last-mile delivery systems around the world presents an exciting opportunity for investors around the world.
For those of you still craving more… a deeper dive into why swappable batteries have momentum and how they hit on all 5 Drivers of Momentum:
DISRUPTION: Shift in mindset
Swappable batteries for commercial vehicles rather than consumer vehicles. Why do they need them? The swapping occurs at a network of battery swapping stations that enable vehicles to insert a pre-charged battery and be back on the road in under 3 minutes (rather than in hours).
- Indian company Sun Mobility is leading the EV charge, utilizing swappable batteries for the ubiquitous Tuk-Tuk and other commercial electric vehicles.
- Chinese company NIO, a competitor of Tesla, is doubling down on the tech with plans to add more than twice its current number of swapping stations by the end of 2021. Other countries too are swiftly making the transition to electric first with mandates that all new vehicles be EVs.
- Stateside, San Francisco startup Ample is demonstrating proof of concept with already five battery swap stations for Ubers throughout the Bay Area.
INNOVATION: Battery technology is constantly changing and evolving.
Why stay stuck with an outdated car battery that can’t be removed from the car? Swappable batteries are enabling drivers to have the latest and greatest technology for their vehicles.
- Chetan Maini, founder of Reva Electric Car Company, applied the sharing economy model to the battery ecosystem — a pay-as-you-go “battery as a service” system that is runs on a digital platform built on the Microsoft Cloud
- Through this model, you subscribe to a battery subscription service rather than owning just one battery for your EV. You pay to swap batteries as you would pay to refuel a regular gasoline-powered vehicle at a filling station. Before your current battery loses power you simply stop off at a swapping station and put in a fresh one. This takes about the same time, if not quicker, than filling a vehicle’s tank. That means you don’t have to wait for hours before your EV hits full charge and you don’t have to change your refueling habits an awful lot.
- “If people are willing to rent homes and cars, I figured they’d be open to renting the battery too,” Maini says.
POLARIZATION: To swap or not to swap…
Tesla is against battery swapping — Sun Mobility and NIO are pro battery swapping. What’s driving the tension?
- Back in 2014, Tesla tried to roll out its own battery swapping technology but swiftly ended the project after only building one battery swapping station. In June 2015, Musk claimed customers weren’t interested in swapping their batteries.
- They still believe that charging cars is the best method and have continued to roll out their Supercharger network. They insist that battery swapping is not the solution, and point to failures from nearly 10 years ago to prove that.
- On the flip side, Chinese competitor NIO launched its swapping battery program back in 2018. Since then, they’ve completed over 1,000,000 swaps at over 200 locations in China. They’re not steering clear of the tech. In fact, they’re doubling down. They’ve promised to install more than double the current amount of stations to 500 battery swapping stations by the end of 2021.
STICKINESS: Foreign governments have adopted EVs and with it, battery swapping.
The U.S. government may not be there yet with EV mandates, but will be soon.
- In order to bring down prices and increase adoption, theIndian government has taken an important decision to promote the use of EVs in the country. They’re allowing vehicles that don’t come pre-fitted with batteries to now be legally registered — a significant step towards endorsing the swappable battery technology from the fastest growing major economy in the world.
- China’s government is also stepping up efforts to allow swapping electric-vehicle batteries on-the-go, seeking to further spur the adoption of EVs in the world’s biggest car market. The government’s goal is to enable drivers to change batteries at any facility, no matter what car they have.
- Demand for electric cars has been sputtering in China since it lowered subsidies for buyers last July, yet the country’s long-term goal is to phase out gas vehicles.
SOCIAL IMPACT: A reduction in carbon emissions
The availability of swappable battery services increases the likelihood that commercial vehicles will use electric power instead of gas wherever cost is a driving factor. The adoption of electric vehicles will help bring down carbon emissions worldwide.