The global Battery Swapping Market 2024 is projected to grow from USD 1.7 billion in 2022 to USD 11.8 billion by 2027, at a CAGR of 46.9% during the forecast period published by MarketsandMarkets. Battery swapping is an alternative method of powering an electric vehicle and involves exchanging discharged batteries for charged ones. This swap method removes the direct relation between the vehicle and the battery, thus decreasing the initial cost of buying an electric vehicle. Battery swapping is mostly eligible in 2 & 3-wheelers, as these vehicles are integrated with small batteries, which makes it easier to swap the battery in them. Compared to conventional charging, battery swapping saves time, space, and money, especially when the system is used efficiently. Additionally, battery swapping offers sustainable and innovative business models, such as “Battery-as-a-Service” (BaaS), in which a service provider does not charge upfront costs for batteries and offers daily or monthly subscription-based rental plans that allow the EV drivers to swap batteries multiple times a day.
Battery Swapping Market 2024 Dynamics: 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
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.
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The automated segment is estimated to have significant share of the battery swapping market 2024 during the forecast period
Battery swapping requires an electric car that is suitable and has a battery architecture built for the swap. In an automated battery swap station (BSS), customers can not only swap out their electric vehicles but also schedule the battery swap ahead of time to ensure that a battery pack will be available. When a vehicle arrives at the BSS, the process officially begins.
The electric vehicle (EV) is placed in the right place in the right direction in an automated battery swapping station and the vehicle is turned off. In the next step, the EV is lifted with the vehicle lift (as shown in the figure below) and the jack pads are drawn by the lift sheets to offer help in the lifting mechanism. When the vehicle is lifted, the bottom of the vehicle covering the battery is loosened up, giving access to the battery that sits underneath the vehicle. The battery lift is lifted till it touches the underside of the battery pack, which helps in battery removal. When the battery pack is positioned accurately above the lift, the battery removing process starts. Next, battery transport is brought underneath the battery lift. The used battery is brought down by the lift, and this battery is swapped for a new one from a battery rack. This charged battery is then lifted and placed under the vehicle. The battery is again positioned and placed accurately. With all the bolts locked and the underbody cover fixed again, the battery is good to go.
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.
Pay-Per-Use Battery Swapping Service by 2024: Market Share and Provider Insights
Pay-per-use service type is expected to have significant battery swapping market 2024 share, in this battery swapping service type that EV owners use to occasionally swap their batteries. This type of battery-swapping service is less affordable compared to the subscription service. Most battery-swapping providers offer this type of service for EV users. SUN Mobility, for instance, provides swapping through its pay-as-you-go model, to make individual swapping more affordable for users. Its swapping costs around USD 0.5-1 per swap (in the pay-per-use model). Gogoro also provides pay-per-use battery swapping for around USD 0.5-2 per swap, depending on the battery type and the country of use. When it comes to 4-wheelers, NIO Power charges around USD 25 per swap for this service.
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 2024, 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 battery swapping market 2024 in this region.
Key Market Players
The battery swapping market 2024 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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Frequently Asked Questions (FAQ):
Is battery swapping the future?
Battery swapping is increasingly seen as a promising solution for the future of electric vehicle (EV) infrastructure, offering several benefits that could make it a key component in the transition to widespread electric mobility. However, its future prominence will depend on overcoming certain challenges and market dynamics.
How big is Battery Swapping Market?
Battery Swapping Market 2024 is projected to grow from USD 1.7 billion in 2022 to USD 11.8 billion by 2027, at a CAGR of 46.9% during the forecast period.
Is battery swapping taking off in China?
Yes, battery swapping is rapidly taking off in China and becoming an important component of the country’s electric vehicle (EV) infrastructure.
Why did Tesla stop battery swap?
Tesla initially explored battery swapping technology as an alternative to traditional charging methods but ultimately decided to discontinue the initiative for several key reasons: Low customer interest, Infrastructure and Logistical Challenges, Advancements in Supercharging Technology and Tesla decided to focus its resources on expanding and improving the Supercharger network.