The switch from Car-as-a-Service to Battery-as-a-Service


Sales of electric vehicles reached record levels last year, but as governments around the world set targets to ban petrol and diesel altogether over the coming decades, innovation will be key to winning hearts and minds.

Although 3.1 million electrified vehicles were sold in 2020 worldwide, this represents just 5% of global sales. Rising pump prices will help to drive adoption, as plug-in vehicles offer substantial fuel savings, in addition to government tax incentives, but a key barrier remains when it comes to convenience. Refuelling a petrol or diesel car takes minutes, while most electrified cars need to be plugged in for hours to cover the same distance.

The answer may lie in servitization, with the provision of ‘Battery-as-a-Service’, or battery swapping.

This removes the recharging limitations of electric vehicle, as drivers just stop at an automated station, swap their depleted battery for a full one in minutes, then continue their zero-emission journey.

This isn’t a new concept, as it has been trialled, and abandoned, by numerous developers, including Better Place, the start-up led by Shai Agassi, which went bankrupt after investing nearly $1 billion trying to get the concept off the ground. Tesla has also side-lined a battery swapping project.

There are two key problems facing the technology. Firstly, the cost of developing the vehicle platforms and network, and secondly the volume of users needed to make it viable.

When Better Place was pioneering the idea, electric vehicles were relatively scarce, but with a clear roadmap to an all-electric future now in place, investors could be persuaded that the massive development costs involved will eventually bear fruit, just as it did for patient capital invested in Tesla.

In Taiwan, Gogoro is proving that the concept can work with a simple battery swapping model based around mopeds. Its network has delivered 185 million swaps, making it a world leader. Other moped manufacturers are now developing models to be compatible with the Gogoro system.

However, this is a manual process, with riders removing their small batteries by hand and swapping them at roadside stations.

Battery swapping for cars is a much more complex operation, requiring robots to remove and replace batteries, significant space for storage, and upgrades to electrical infrastructure.

New start-up Ample says it has learned the lessons from Better Place to develop a new battery swapping model for electric vehicles, with an ambition to put 1 billion cars on the road. It has raised $70 million to date to develop the concept.

Chinese manufacturer Nio is proving that car battery swapping works in the real-world, having launched a network of 301 stations to support its electric vehicles in 2018. Since then, it claims to have delivered 2.9 million swaps and is discussing collaborations with other manufacturers.

So, with advances in technology and continuous innovation in the EV industry, it is safe to say the potential is there for change that would deliver fast fuelling to EVs.

Whether the innovation will be a success in a few years, or a failure, depends on long-term investment worth billions of dollars and widespread use of the technology.

So, although EVs are set to become an everyday sight, drivers will still have to plug in rather than opt for ‘Battery-as-a-Service’ for the foreseeable future.


* Chris Tobey is global sales director at NETSOL Technologies. He has extensive experience working with auto and asset finance companies and banks in multiple countries and has more than 20 years of industry knowledge with an accomplished background and domain-specific insights in wholesale finance.