Electric cars may be the future but they have a major limitation: it takes too long to charge their batteries. For example, even Tesla’s “fast-charging” option takes 30 to 40 minutes to bring the battery to an 80% charge. That’s eons compared to the few minutes it takes to refill a gas tank. What if, instead of waiting for a battery to juice up, why not just swap it out for a fully charged one?
In the last decade, at least two companies have tried to bring this idea to fruition. Better Place was an Israeli startup that raised nearly $1 billion to build out battery-swapping stations but a mixture of mismanagement and being too early—electric vehicles hadn’t yet penetrated the market widely enough—led it into bankruptcy in 2013.
The other company was Tesla, which in 2013 launched a pilot program where Model S owners could swap out their battery at a station in California. However, in 2016, it gave up on the idea. Most likely that was because it didn’t have enough car owners using the service. Batteries are expensive, accounting for up to 40% the total cost of an electric car. That means the inventory of a battery-swapping station can run into the hundreds of thousands of dollars, making the enterprise really expensive unless there are enough cars using the service to reach scales of economy.
But the Chinese don’t mind making the upfront investment. For example, NIO, a Shanghai-based startup, currently sells the ES8, an all-electric SUV, which has a swappable battery. But it’s unclear just how many battery-swapping stations it has built so far.
BJEV, a state-owned company, is betting that having a large number of fleet-car customers, like taxi companies and corporate owners (like hotels) that maintain a lot of cars as part of their business, will make it economically feasible to build enough swapping stations without worrying about what any other manufacturer is doing. BJEV has already built 100 battery-swapping stations across the country. It plans to build as many as 3,000 by 2022—which should be enough to serve 500,000 cars.
For the rest of the world—that can’t risk huge upfront investment—the way to get battery-swapping to reach the scale of gasoline stations, all electric-car companies would have to agree on a single battery-pack design. But that’s not happening anytime soon.