Original by New Energy Insights (ID: xinnengyuanqianzhan)

2938 words, 8 minutes read

Imagine you're about to embark on a journey in your electric vehicle but discover it's low on battery. What would you do?

If it were a traditional electric car, you'd probably have to find a charging station and wait patiently. But if your car supports battery swapping, everything becomes much simpler.

In China, NIO leads the way in battery swapping. According to official NIO data, as of November 13, 2024, NIO has established 2647 battery swapping stations nationwide. This extensive network allows owners to enjoy more convenient battery swapping services.

The rapid rise of the battery swapping model is profoundly transforming the landscape of the new energy vehicle (NEV) market and owners' refueling options.

In the long run, with continuous technological advancements, ongoing policy support, and growing market demand, "battery swapping for all" is no longer a distant dream. Perhaps, in the near future, the sight of long queues at highway service stations during holidays for charging will be a thing of the past. A combination of ultra-fast charging and battery swapping will provide users with more flexible and diverse refueling solutions, enabling NEVs to lead the trend in a wider range of scenarios.

1. Swap and go, addicted to battery swapping

Battery swapping refers to the process where, when a vehicle's battery is low, the owner can directly visit a dedicated swapping station and replace the old battery with a new one in just two to three minutes. The entire operation is as quick and convenient as refueling. Battery swapping focuses on physical replacement rather than chemical reactions, so theoretically, as long as there are enough swapping stations with a reasonable distribution, there is virtually no so-called "range anxiety."

Cheng Ze (pseudonym), a NIO ES8 owner in Beijing, shared his experience: "I used to worry about running out of battery, so I'd always plan my route and locate charging stations in advance for long trips." Since using NIO's battery swapping service, he no longer has to worry about this.

Photo/NIO ES8

Source/Captured by New Energy Insights

While aware of the benefits of battery swapping, Cheng Ze wasn't initially interested in it a few years ago. "My car is brand new, with a brand new battery. I don't want to swap my nearly perfect battery for an old one at a swapping station." This sentiment is not uncommon. It wasn't until two years later, when Cheng Ze's battery was no longer brand new, that he started visiting the NIO swapping station near his home.

The quick battery swapping process became addictive for Cheng Ze – after parking the car, the station's robotic arm swiftly removes the old battery and installs a fully charged new one, all within minutes. Compared to traditional charging methods, battery swapping significantly reduces waiting time and alleviates NEV owners' range anxiety.

Photo/Battery swapping process at a swapping station

Source/Screenshot from the internet, New Energy Insights

Unable to stop, Cheng Ze's charging pile in the garage suddenly became obsolete. Instead of charging for extended periods, it's more convenient to just drive to the swapping station. "When I parked at home the other day, I noticed dust on the charging gun. It's been a long time since I used it."

Battery swapping not only enhances vehicle efficiency but also offers cost-effectiveness and environmental benefits. For frequent travelers, battery swapping is a blessing. Cheng Ze commutes over 60 kilometers to work every day. With battery swapping, he no longer worries about running out of battery.

Battery swapping technology not only solves range anxiety but also brings many other benefits. Rapid refueling means vehicles can get back on the road faster, which is particularly important for city dwellers with tight schedules. Centralized battery management and maintenance can also extend battery life and reduce environmental pollution.

There are now more and more models on the market that support battery swapping. NIO's ES8, ES6, and ET5 have won market recognition with their stylish designs and luxurious configurations.

Besides NIO, its subsidiary Ledao Nature is also a supporter of battery swapping. The launch of Ledao L60 has attracted more young people to battery swapping, and Ledao is actively expanding its swapping station network nationwide. Additionally, NIO's third brand, Firefly, will introduce battery swapping to lower-tier markets in December.

2. With more battery swapping models, should you rent or buy the battery?

When it comes to battery swapping, consumers often think of NIO first. Indeed, as a star player in the NEV industry, NIO's every move influences consumers. However, automakers like Geely, Hongqi, and BAIC are also active in the battery swapping space.

Recently, Geely's battery swapping NEV brand, Ruilan Auto, announced the launch of a battery swapping pilot for the Ruilan 7 in Chongqing and introduced a series of battery swapping benefits. These include a three-year, interest-free loan of 80,000 yuan, free battery swapping services four times a month at any time, and a battery rental model that separates the car and battery, reducing the purchase price by an additional 30,000 yuan, with a monthly battery rental fee of only 499 yuan.

Photo/Ruilan Auto and purchase benefits

Source/Screenshot from the internet, New Energy Insights

Geely is actively collaborating with multiple companies to gradually expand its battery swapping station network, providing owners with more convenient and faster swapping services.

Unlike NIO, which primarily targets ordinary consumers, Geely's battery swapping models also serve corporate clients, such as ride-hailing services. Hongqi and BAIC's battery swapping models are more commonly used for ride-hailing, like the BAIC EU5 and Hongqi EQM5 battery swapping versions.

Photo/BAIC EU5 and Hongqi EQM5 battery swapping versions

Source/Screenshot from the internet, New Energy Insights

As the number of models and owners increases, so does the battery swapping station network nationwide. NIO plans to establish 4,800 swapping stations by 2026.

So, how should consumers choose a battery swapping model?

If consumers are set on a battery swapping model, the choice is actually easier than for non-swappable cars because they don't have to consider parameters like driving range and refueling speed. They only need to consider factors like vehicle space, price, and usage scenarios.

Regarding whether to rent or buy the battery, in general, consumers who don't plan to replace their car soon are suitable for buying the battery, while those with limited budgets may opt for renting. Buying the battery offers higher autonomy, while renting lowers the initial entry barrier. Consumers need to consider their own driving needs and budget.

One of the biggest attractions of renting a battery is its lower initial cost, which reduces financial pressure on consumers. Additionally, rental services usually include maintenance and support, meaning if there are any battery issues, the automaker will be responsible for repairs or replacements, alleviating users' concerns.

In contrast, while buying the battery requires a higher initial investment, it is more cost-effective in the long run.

Taking NIO's BaaS (Battery as a Service) as an example, for NIO's standard range models, the car price is reduced by 70,000 yuan, with a monthly battery rental service fee of 728 yuan. For NIO's long-range models, the car price is reduced by 128,000 yuan, with a monthly battery rental service fee of 1,128 yuan.

For users who choose to rent the battery, the standard range model comes with a promotion of "rent 4, get 1 free" within five years, effectively reducing the monthly rental fee to only 582.4 yuan, with a total cost of 34,944 yuan over five years. For users who want to change their car within five years, this is very cost-effective compared to the 70,000 yuan buyout price, essentially saving half on battery costs. However, by the ninth year of renting, the total rental cost will exceed the buyout price.

3. How far are we from "battery swapping for all"?

Whether renting or buying the battery, battery swapping models offer consumers an additional refueling option, allowing them to either swap or charge as needed. When there's a swapping station nearby, owners can choose the more convenient battery swapping. When there's no swapping station nearby but they need to refuel, they can use the more widely distributed charging piles.

Combined with free quality inspections and lifetime warranties, battery swapping is becoming increasingly accepted by consumers. However, achieving "battery swapping for all" still faces some challenges.

The primary challenge is the coverage of swapping stations. The distribution of swapping stations is particularly important for promoting the battery swapping model. The National Development and Reform Commission (NDRC) has issued the "Notice on Further Improving Financial Subsidy Policies for the Promotion and Application of New Energy Vehicles," clearly encouraging and supporting the development of the battery swapping model. These policies provide a strong guarantee for the promotion of battery swapping technology.

Photo/NDRC subsidy policy

Source/Screenshot from the internet, New Energy Insights

Despite national policy support and the increasing number of swapping stations, some areas, especially small towns and remote mountainous regions, may still lack sufficient coverage. This is a major stumbling block for promoting "battery swapping for all."

The second challenge is the standardization of battery specifications. Currently, there are significant differences in battery sizes and interfaces among different brands, preventing resource sharing and increasing construction and operational costs. To address these issues, both the government and enterprises are taking active measures.

Multiple automakers, including NIO and Geely, have jointly established the "Battery Swapping Alliance" to promote the standardization of battery specifications and facilitate resource sharing. The establishment of the alliance marks the beginning of collaboration within the industry to jointly promote the development of battery swapping technology. By unifying battery specifications, construction costs can be reduced, and resource utilization efficiency can be improved.

Additionally, battery giant CATL has announced plans to invest heavily in the construction of swapping stations over the next few years, further accelerating the popularization of battery swapping technology. CATL's involvement injects new momentum into the development of battery swapping technology. As a leading battery manufacturer with rich experience in battery technology and supply chain management, CATL will help promote the standardization and scalability of battery swapping technology.

There's also an industry view that once true solid-state batteries are available, the battery swapping model will become obsolete. However, this view is currently unfounded. Regardless of the battery type, charging time cannot be faster than battery swapping, which takes only 2-3 minutes for a full charge.

Moreover, solid-state batteries are not only expensive but also have high maintenance costs. Even if consumers use solid-state batteries, they still have to bear the costs of quality inspection, maintenance, and even replacement, which can be a heavy burden. Battery swapping eliminates these worries.

It is foreseeable that as more automakers join the Battery Swapping Alliance, battery swapping will become an important part of the NEV industry, contributing to the realization of a green and low-carbon transportation vision.