Battery Swapping Market

The global battery swapping market in terms of revenue was estimated to be worth $1.7 billion in 2022 and is poised to reach $11.8 billion by 2027, growing at a CAGR of 46.9% from 2022 to 2027. Increased demand for efficient, long-range, and low-emission vehicles is expected to boost the battery swapping market. Countries around the world are undertaking efforts to reduce emissions from vehicles in the coming decades. Compared to battery charging, battery swapping offers a quick battery exchange option. Government policies in countries like India for battery swapping are expected to drive the market in the future. Similar incentives by different countries are expected to increase the demand for electric vehicles, specially E2Ws and E3Ws equipped with swappable batteries. Battery swapping increases the vehicle's operational life while maintaining the majority of its value as a used vehicle.

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Market Dynamics:

Driver: Increasing reliance on micromobility

The use of EVs in micromobility is becoming popular, with many nations supporting micromobility companies by providing infrastructure, allocating specific areas in cities for service trials, and working with these companies to establish micromobility in the country. The durability and safety of shared e-scooters have improved over the last several years. But there is still one issue that stands out: the issue of recharging. While the electric vehicle industry struggles with issues related to range, recharge times, and infrastructure, micromobility may have it much easier.

Okai, an electric scooter manufacturer, collaborated closely with sharing service providers, especially Tier, to provide battery-swapping solutions for micromobility. Choosing a user-friendly swappable battery solution was the first step in this collaborative effort. At Okai, the engineers and designers were tasked with making "safe, simple, entertaining" battery swapping a reality. Okai created the ES400B Electric Scooter and the Okai EB100 Electric Bike, which employ the same swappable battery system, another distinctive innovation, to fit the hardware and software of Tier's breakthrough in-store charging cabinet (through the PushMe acquisition). With the apparent advantage that it can be used for e-bikes and perhaps other vehicles in the future, Tier is implementing the system in all of the European towns where it operates. Since battery swapping is such an effective solution to a difficult problem and benefits users, sharing providers, and small businesses, it will soon be accepted as the industry standard

Restraint: Lack of standardization of batteries used in different vehicles

The inability of automakers to agree and commit to creating vehicles that are particularly suited to run on standardized swappable battery packs is the main obstacle before the planned deployment of standardized batteries for EVs. The success of such an initiative assumes the involvement of a significant number of automakers, at least during the system's setup and launch, who will define the technical specifications and establish the standardized parameters. Currently, this level of collaboration between the automakers appears to be rather challenging, particularly in light of numerous prior failed initiatives in several other industrial areas.

The standardization of batteries comes with its own problems. There are many technical difficulties in standardizing battery specifications that are already present in the market, and most OEMs are currently not in favor of standardization. A report from the vice president of one of the reputed energy companies stated that linking standardization of batteries in personal passenger vehicles will decrease innovation. Battery standardization is very necessary for the BaaS model to become effective. In order to offer services to all kinds of vehicles, standardization of batteries is a must.

Opportunity: OEMs plans on selling EVs without batteries will increase demand for batteries as a service

Battery-as-a-service (BaaS) enables users to lease batteries apart from the vehicle, eliminating the need for an upfront battery along with the vehicle’s purchase. The battery would be leased from a provider of charging infrastructure under the BaaS model, and every time the battery requires recharging, it would be swapped out at a station.

From the standpoint of the consumer, BaaS is an asset-light, low-cost, and quick-on-its-feet approach that enables the customer to swap the battery quickly, as compared to a fixed charging station where the charging of the batteries takes time and requires an expensive charging infrastructure. Due to the BaaS model, the upfront costs of EVs may fall significantly; for example, the expenses for two-wheelers may easily decrease by up to 20%. The model reduces the price of establishing a retail charging station and related infrastructure. BaaS providers can also grow their networks by working with organizations that have extensive networks of agents and charging infrastructure, similar to how banks use business correspondents to expand their banking services to the unbanked and underbanked areas.

Challenge: Complex infrastructure of swapping stations

Battery swapping requires investments in equipment and property estate in addition to batteries and inventories. The swapping stations must be placed in high-traffic areas that are simple for users to access, which will result in expensive leasing fees. Asset use becomes essential for long-term viability in a corporation that relies heavily on capital expenditures. Therefore, it is crucial to create demand for BaaS, which can be done by capital demand and confirming minimum capacity utilization (e.g., fleets, vertical integration). The implementation of battery swapping is practically a challenge. First off, it costs a lot of money to set up a battery swapping system because it requires expensive robotic technology to switch the battery and plenty of expensive batteries to operate. Second, the area required to construct a battery swapping station is significantly larger than that for a charging station because it must hold both depleted and fully charged batteries. Thirdly, before the potential deployment of autonomous battery switching, EV batteries need to be standardized in terms of their physical dimensions and electrical properties.

The Subscription segment to be the largest segment by service type during the forecast period

Subscription service in battery swapping is a more sustainable approach to the use of battery swapping. This allows users to swap batteries at much lower rates compared to the pay-per-use model. Most battery swapping providers offer this kind of battery swapping service as well as provide great offers to long-term users. An important aspect of the battery-swapping subscription service is the number of swaps available as part of the service per month. Most 2- and 3-wheeler swapping providers provide 12-18 swaps per month, depending upon the battery power capacity, number of batteries in the vehicle, and other factors. Four-wheeler battery swap providers on the other hand provide 4-6 swaps (e.g. NIO Power) as that much is usually sufficient for monthly EV usage.

While most users opt for monthly subscriptions, annual subscriptions and quarterly subscriptions are also available from top battery-swapping providers such as Gogoro and Immotor. Gogoro, for instance, charges around USD 10-30 per month for 2-wheelers in the Asia Pacific region. Immotor provides subscription services for battery swapping for around USD 5-10 per month for 2-wheelers. NIO Power on the other hand provides around 4-6 swaps as part of a USD 135 subscription.

2-wheeler segment is expected to have high demand during the forecast period

Even with high electricity prices, E2Ws are continually more cost-effective than gasoline vehicles, and point charging is still the most practical at low and medium utilization rates (less than 100 km per day). However, battery swapping is the most cost-effective solution for daily usage of 140 km or more. ICCT also discovered that battery swapping becomes the most cost-effective alternative for daily consumption rates of 120 km and higher if the overall cost per kilowatt hour (kWh) is reduced.

Compared to fixed batteries, swappable batteries are often lower in size. Swappable batteries typically have a capacity of 1 to 1.5 kWh, weigh 10 to 12 kg, and are modular in design. E2Ws are lighter because of their smaller batteries, which improve energy efficiency and increase the range of the available charge. Riders of E2Ws in the city are never more than a few hundred meters from a swapping station.

The Europe market is projected to to grow at faster rate during the forecast year

Europe was one of the fastest-growing regions in the battery swapping market, NIO Power, a leading manufacturer of electric vehicles in China, recently announced plans to grow operations and introduce its line of electric vehicles to Europe, including the UK. NIO co-founder Lihong Qin revealed that the company will introduce its ET5, ET7, and EL8 electric vehicles in the UK toward the end of next year after doing so in Germany, the Netherlands, Denmark, and Sweden.EU initiatives for greener transportation and high funding achieved by local players like Swobbee and others are also expected to drive the market in this region.

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Key Market Players

The battery swapping market is dominated by players such as NIO Power (China), Gogoro (Taiwan), Immotor (China), Aulton (China), and Sun Mobility (India). These companies adopted new product launches, partnership, and supply contracts to gain traction in the market.

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Scope of the Report

This research report categorizes the Battery Swapping market on the basis of Application, Service type, station type, battery capacity, vehicle type and Region

Battery Swapping Market, by Application

• Passenger
• Commercial

Battery Swapping Market, by Service Type

• Subscription
• Pay-per-use

Battery Swapping Market, by station type

• Manual
• Automated

Battery Swapping Market, Logistic by battery capacity

• >30 kWh
• <30 kWh

Battery Swapping Market, by vehicle type

• 2-wheeler
• 3-wheeler
• 4-wheeler

Battery Swapping Market, by Region

• North America (US, Canada)
• Europe (Germany, France, UK, Netherlands)
• Asia Pacific(China, India, Japan, South Korea, Taiwan, Vietnam, Thailand, Indonesia)

Recent Developments

• In February 2022, MG Motors showcased its upcoming EV, the MG 4, which is expected to launch in India later in 2022. The EV will come with a 61.1 kWh battery pack and is expected to run around 400 km.
• In November 2022, Gogoro and Zypp Electric entered into a strategic partnership to start a B2B pilot program in New Delhi in December 2022. Zypp Electric will receive Smart Scooters from Gogoro with Smart Batteries as well as GoStations from the Gogoro Network for battery swapping.
• In August 2022, NIO Power started testing 3rd generation battery swapping stations that can send power back to the grid. When one EV driver replaces his/her battery at the charging station, the other ten or eleven batteries can then be discharged back to the grid for five to ten minutes, barely interfering with the regular battery replacement services.
• In August 2022, EVeez partnered with SUN Mobility to deploy over 10,000 vehicles across India in the coming years. The firms hope to further accelerate the adoption of electric vehicles in order to address the growing environmental issues.
• In July 2022, Immotor received USD 28 million in a series C financing headed by PTT, a Petronas affiliate, and PIVL, a Thai state-owned corporation. Immotor stated that it will examine the Southeast Asian market using links with its two conglomerate financiers, PTT and Petronas.
• In October 2021, NIO Power opened its first battery-swapping station in Norway. The Power Swap Station 2.0 features a better battery-swapping experience and can perform 312 swaps every day. Additionally, users can start the self-service switch with a single tap on the central display without getting out of the car, and the vehicle can autonomously drive into the station.

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