XIAMEN, China — The leading global manufacturer of electric vehicle batteries announced on Wednesday its significant entry into the battery swapping market in China, set to begin next year.
The concept of battery swapping allows for rapid recharging, akin to fueling a traditional vehicle. In this system, depleted batteries are exchanged for charged ones at designated stations, eliminating wait times associated with conventional charging methods.
CATL, based in China, has revealed its ambitious plan to establish 1,000 battery swap stations across the nation, which will also include locations in Hong Kong and Macao. The company aims to expand this network to 10,000 stations in collaboration with partners in the long term. If realized, this initiative could compete with Nio, a decade-old electric vehicle manufacturer in China that has already built over 2,700 stations and is targeting at least 5,000.
Such an expansive infrastructure has yet to be replicated on this scale in other countries, although Nio operates approximately 60 swap stations in northern Europe. The substantial investment in this venture is feasible in China, where government initiatives have transformed the automotive landscape, making it the largest electric vehicle market globally and a forefront leader in EV technology.
During a grand presentation in Fujian province, where CATL is headquartered, CEO Robin Zeng expressed his vision for the future, predicting that by 2030, battery swapping, home charging, and public charging stations will share the market. He called on potential corporate partners to collaborate on developing more convenient, cost-effective, and secure services for consumers, which would foster a new lifestyle.
Despite the promising outlook, battery swapping encounters certain challenges. A significant hurdle is the need for a standardized battery pack that would allow all swap stations to accommodate a variety of models, as many electric vehicles are designed differently. In contrast, electric cars in China can utilize any charging station due to a standardized plug system, and advancements in rapid charging technology are decreasing recharging times.
Jing Yang, a director at Fitch Ratings specializing in China’s automotive and renewable energy sectors, noted that some car manufacturers might hesitate to adopt standardized battery packs due to fears of losing control over their supply chains. Nevertheless, testing battery swapping alongside CATL or Nio could be financially advantageous for those looking to enhance sales.
Lei Xing, an analyst of the Chinese auto industry, argues that battery swapping can serve as a complementary feature to China’s established charging network. He believes while it may not achieve mainstream status, it will likely play an integral role in the overall infrastructure.
Michael Davidson, an expert in renewable energy at the University of California, San Diego, also anticipates that charging will remain the dominant method, with battery swapping emerging as an additional option.
The implementation of battery swapping has shown to be more straightforward with fleet vehicles like taxis, buses, and commercial trucks, which often have uniform models or fixed routes. CATL previously initiated a small pilot project focused on taxi services two years ago, and they plan to start rolling out the battery swapping service primarily for fleet operators before extending it to individual vehicle owners, according to Zhang Kai, the deputy president of CATL’s battery swapping division.
Battery swapping offers a speedier alternative to fast-charging, with the CATL EVOGO stations capable of replacing a battery pack in just 100 seconds. This feature is particularly beneficial for taxi and truck drivers who prioritize efficiency.
Wang Wubing, a driver for China’s popular Didi ride-hailing service, mentioned at an EVOGO station in Xiamen that he prefers battery swapping for its time-saving advantages, which allows him to accommodate more passengers. However, he acknowledged that battery swapping is pricier than traditional charging.
Both CATL and Nio have formed partnerships with automakers to utilize their swap stations, raising the crucial question of whether a sufficient number of manufacturers and drivers will adopt this system to ensure that the swap stations operate profitably.
