Battery Swapping Still Faces Issues, May Succeed Anyway, Says BNEF

Like Michael Burry, it was certainly early but perhaps not wrong.

EVs need a rapid and convenient way to get energy back, similar to filling up a tank. The obvious way to do that would be to swap its depleted battery pack for a fully charged one. Despite the challenges that this still faces and the failed attempts in the past, BNEF wonders if battery swapping isn’t like Michael Burry in the movie The Big Short: early, but not wrong.

The main stumbling blocks ahead of it are four: a common standard for all manufacturers, finding the right locations for swapping stations, all the hardware that can break down in the process, and how capital intensive that would be. 

BNEF also remembers the Better Place debacle but puts it under the right perspective. The situation was very different in 2013 when it went bankrupt. Although the $900 million it raised were a lot of money at the time, it is not comparable to how much money can be put in EV startups these days.

According to the US Inflation Calculator, that would be equivalent to $1,016,121,430.14 in 2021. Lucid’s market cap was supposed to start at $12 billion. The current value of Churchill Capital Corp IV (CCIV) – which will eventually become Lucid Motors (LCID) after the SPAC completes its merger with the automaker – is $6.3 billion.

In other words, electric vehicle startups can currently raise way more money to make battery swapping viable. As we already mentioned several times, it is the perfect scenario for EV owners because they do not have to worry about replacing an old battery pack. First-generation Nissan Leaf owners are now in these crossroads and are given two choices: sell their cars to junkyards or spending more than they are worth in a working battery pack.

On the other hand, the decaying battery packs become a liability to the automakers that champion battery swapping. If they fail, it is the manufacturer who bears the costs for replacing it, not the car owner. What could seem like a dead-end in the past is now a business opportunity for Nio and Ample.

While the first has already done more than 2 million battery swaps in China with 192 stations, Ample plans to solve the standard issue with Lego-like battery modules that can fit any electric car. For the record, Nio aims to have 500 battery swap stations by the end of 2021.

Electric taxi cab fleets now make the idea of battery swapping much more viable than it was when Better Place tried to launch. With battery swapping, it may not be necessary to have 800V or 900V in the battery packs, which can be a safety hazard, as Toroidion warned. 

BNEF also wonders if that would not be the right solution for electric trucks. Something the article did not bring up was that battery swapping stations can work as micro or mini-grid backups to keep the grid stable in place of thermal power plants. Only time may prove if the method is like Michael Burry. Right now, it does not seem to be so early but definitely looks less wrong than it did in 2013.

Source:BNEF

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