Electric vehicle (EV) detractors foretell of the same feeble demise: what if your battery-powered vehicle is about to die, with nowhere to plug in nearby? That’s a challenge the EV industry has worked for years to solve. The solution relies on a strong foundation of charging infrastructure.
In November 2020, Tesla’s CEO Elon Musk boasted at the company’s Battery Day about a new long-range battery that could allow drivers to travel up to 500 miles (804 km) on a single charge, compared to the standard range of between 250 miles and 350 miles per charge.
Shanghai-based Nio, on the other hand, promised a range of more than 620 miles, or 1,000 km from a single charge, when unveiled its new ET7 Sedan this month. However, the announced solid-state 150 kWh battery won’t be available until next year, and drivers will have to rely on the standard battery, with a range of about 310 miles, or a larger 100 kWh battery which can provide up to 435 miles of range, as of now.
Nio drivers can also opt for Nio’s Battery-as-a-Service (BaaS) model, which allows greater flexibility in terms of battery type. Instead of waiting for hours for a vehicle’s battery to charge, drivers can opt for a battery swap that takes just five minutes at special Nio Power Swap stations.
China’s robust deployment of EV charging stations around the country has strengthened the next generation vehicles’ viability in the minds of many consumers.
As of June 2020, China’s charging infrastructure had expanded significantly to include 764,000 charging poles for private residences, and 558,000 public charging stations. By contrast, the US had only 101,000 charging outlets at the same point in time.
With EVs centered in the intersection of fostering consumption, climate policy, and technological development, policymakers in Beijing are expending resources to advance the EV sector, with another USD 1.4 billion earmarked for EV infrastructure in a stimulus package introduced in March 2020, with a focus on industrial upgrades.
So far, China’s public charging infrastructure network remains concentrated in first-tier cities and more prosperous coastal provinces, but new facilities and options are gradually being built further inland.
Swap or charge?
Competition for the fastest charging speed has been intense in the EV industry, with sector leader Tesla deciding to pursue a supercharger network strategy after launching its first and last battery swap station in Harris Ridge, California, in 2013, before abandoning the project, deeming the USD 3 million per swap station investment too costly.
Tesla’s supercharger in China network may seem to be comprehensive, but considering that 90% of China’s 1.4 billion people live in the country’s eastern half, the charger density has ample room for growth.
After deploying 2,500 stations in 150 cities over the past five years, the company intended to install another 4,000 superchargers in 2020, driven by swelling demand. In November 2020, Tesla even announced plans to invest RMB 42 million (USD 6.4 million) in the production of superchargers at a plant near its Shanghai Gigafactory, with an annual output goal of 10,000 supercharger stalls.
Nio, instead, has managed to deploy its battery swap system as an alternative to chargers. Since 2018, when the service was introduced, the company has completed over 1 million swaps at the firm’s 170 Power Swap stations across China.
Nio’s battery swap is free for vehicle owners, takes less than 5 minutes, is completely automated, and does not even require the driver to exit the vehicle. So what is stopping battery swaps from becoming the dominant refueling technique of the future? One major issue is interoperability.
Challenges with scale
While Tesla’s China VP Grace Chao mentioned in November that Tesla has not ruled out opening its charging network to other automakers, Nio’s battery swap technology is built specifically for its own brand, limiting scalability and appeal to the wider EV market.
Chinese officials have previously stipulated the need for industry standards in battery swapping, not only to increase the convenience of refueling EVs, but also to lower the prices and increase the market competitiveness of EVs, as costly battery components can be leased instead of purchased.
Currently, Nio’s Power Swap stations are concentrated in first-tier cities like Beijing and Shanghai, lacking the geographic expanse of Tesla’s charging network. Some efforts are being made to increase accessibility, with the goal of reaching 500 stations by the end of 2021. Nio unveiled in January its next-generation of battery swap stations, which can process up to three times more swaps per day than its predecessor.
As Nio becomes more popular, so does demand for more battery swap stations, which have not kept pace with sales growth. Nio delivered 43,728 cars in 2020, more than double the previous year, but the number of Nio vehicles on the road per battery swap station increased from 323 in May 2020 to 445 by the end of the year, resulting in more crowded swap stations and longer wait times for drivers.
If the growth of Nio’s swap stations cannot keep up with the company’s sales boom, then its battery swap model may lose its greater convenience compared to charging networks, while swapping is already unable to compete with charging in terms of scale.