Electric Vehicle Battery Swapping Market Size, Share & COVID-19 Impact Analysis, By Service Type (Subscription Model, Pay-Per-Use Model), By Vehicle Type (Two-Wheeler, Three-Wheeler, Others), and Regional Forecast, 2021-2028

The global electric vehicle battery swapping market size was valued USD 100.2 million in 2020 and is poised to grow from USD 119.4 million in 2021 to USD 641.0 million by 2028, at a CAGR of 27.1% during forecast period. Based on our analysis, the global market exhibited a decline of -15.6% in 2020 as compared to the average year-on-year growth during 2017-2019. The global impact of COVID-19 has been unprecedented and staggering, with electric vehicle battery swapping witnessing a negative impact on demand across all regions amid the pandemic. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Electric vehicle battery swapping can be defined as the process of swapping discharged or depleted batteries for charged ones, with the operation only requiring as much time as refueling a conventional vehicle.  Thus, battery swapping eliminates concerns related to electric vehicle (EV) adoption, such as long charging times, range anxiety, and high battery replacement costs. Furthermore, by separating the battery and the vehicle, the battery swapping model reduces the EV purchase cost and enhances the competitiveness of the electric vehicle market. These factors will influence the electric vehicle battery swapping market growth.

Strong Policy Support to Counter COVID-19 Pandemic Will Positively Influence Growth

Majority of the companies involved in the market are startups. They are expected to face difficulties concerning fundraising during the short term. However, startups, such as Numocity, are vital for developing the electric vehicle sector in high-volume emerging economies. Hence, fundraising/merger & acquisition activities are expected to be picked up in the medium and long term.

The sale of electric vehicles increased exponentially in 2020. According to the International Energy Agency (IEA), electric car sales increased by nearly 40%, from 2.1 million in 2019 to over 3 million in 2020. 2020 was a target year for emission regulations, particularly in Europe. For instance, a new target of 95 grams of CO2 per km was set for 2021. Moreover, targets will become more stringent with a 15% and 37.5% decrease in the corporate fleet average tailpipe emissions required in 2025 and 2030, respectively. Electric vehicles are crucial to meet these targets. Several governments, such as Germany, France, and the U.K., increased purchase subsidies to support the purchase of EVs and supporting equipment. Thus, there was strong policy support.

Furthermore, continuous decrease in battery costs, upgrades in performance, and model choice offered by OEMs and fleet operators transitioning to eco-friendly vehicles also contributed to the continued electric vehicle uptake. Thus, the consistent increase in demand for electric cars and heavily incentivized support for public transportation companies accelerating fleet transition will create positive demand for battery swapping systems in the long term.

LATEST TRENDS

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Battery as a Service Model Will Positively Influence Growth

The battery as a service (Baas) model eliminates the risk associated with owning batteries and significantly reduces the total vehicle cost for owners. For instance, in August 2020, NIO launched its Baas Model, which offers a USD 10,000 deduction of the original purchase price and only USD 142 subscription fee for charging and swapping batteries. Furthermore, in China, as part of the NEV 2020 policy, EVs that cost more than USD 43,000 are eligible for subsidies only if they support battery swapping. Hence, the Baas model will positively influence the growth of the market.

DRIVING FACTORS

Power System Benefits to Augment Market Growth

With the increasing demand for larger battery capacity, there is rising need for fast chargers. To satisfy daily energy requirements and keep up with the expanding battery capacities, users will also need to upgrade their charging equipment. In this aspect, battery swapping is superior to conventional charging setup as upgrades will only be required at the battery swapping stations (BSS). In the traditional infrastructure, upgrades would be needed at the household level and the charging station.

Furthermore, as the BSS site is a collection of batteries, it can smoothen the daily demand curve by resupplying power to the grid. This feature also creates additional benefits such as load following, frequency regulation, and voluntary reserve provisions. Hence, these factors will propel the demand for electric vehicle battery swapping.

Easier Management for Energy Producers and Transmission System Operators (TSO) to Propel Demand for Electric Vehicle Battery Swapping

Batteries are centrally charged in the BSS model, where the centralized charging station's power is enormous. However, the power can be controlled centrally, which is helpful for the distinct formation of power grid lines. Individual connection to a network of widely distributed cable-charging stations is more complex than a BSS site using systematic, standardized solutions for connecting to the grid. Therefore, for TSOs, negotiating becomes more accessible due to fewer market key players. Hence, these factors will fuel the adoption of electric vehicle battery swapping.

RESTRAINING FACTORS

High Total Cost of Investment to Restrain Growth

According to NIO, the battery swapping station, which includes site leasing, batteries, labor, and other equipment, costs about 5 million yuan (USD 772,800). The cost is significantly higher than the construction cost of a charging station (around 2 million yuan or USD 309,112). The annual depreciation cost of a battery swapping station is approximately 500,000 yuan or USD 77,280. A first-generation, second-generation, and third-generation NIO station keeps around 6, 13, and 28 batteries in storage. This translates to a considerable amount of capital tied up and a high increase in the total investment cost. The value of the old batteries belonging to operators will depreciate substantially when a new generation of batteries is launched in the market. Hence, these factors will restrain the growth of the market.

SEGMENTATION

By Service Type Analysis

Subscription Model Segment Accounted for the Largest Market Share in 2020 due to Affordability

Based on service type, this market is segmented into subscription and pay-per-use models.

The subscription model segment is expected to lead the market during the forecast period. Factors such as affordability, low cost per swap, and battery leasing solutions are credited for the high share of subscription models.

The pay-per-use (PPU) model segment is anticipated to exhibit a higher CAGR during the forecasted period. This can be attributed to the increased PPU model adoption among private customers who use their vehicles infrequently and avoid upfront capital expenditures.

By Vehicle Type Analysis

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Two Wheeler Segment Held the Largest Market Share Attributed to the Low Cost

The market for electric vehicle battery swapping is segmented by vehicle type into two-wheeler, three-wheeler, and others.

The two-wheeler segment accounted for 67.1% share of the market in 2020. Factors such as increasing government support for electrification of transport and rising excellent compatibility of two-wheelers with modular design approach will propel the growth of this segment.

The three-wheeler segment is expected to register a more superior CAGR during the forecast period. There were around 1.5 million electric three-wheelers in India in 2019. Sales of electric three-wheelers have continued to increase in China and India with new domestic brands. Battery swapping offers greater mobility and considerably reduces the total cost of ownership for rickshaw drivers. These factors are attributed to the growth of this segment.

REGIONAL INSIGHTS

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In terms of geography, the market studied across North America, Europe, Asia Pacific, and the rest of the world.

Asia Pacific accounted for the largest electric vehicle battery swapping market share in 2020 at USD 70.1 million. Large Japanese automakers are developing economically feasible and practical solutions focusing on emerging economies in the Asia Pacific. Hence, they collaborate with domestic battery manufacturers to jointly develop and commercialize batteries and vehicles in an integrated modular design. In China, the adoption of the battery swapping model has increased exponentially as it has emerged as a viable complementary solution to cable charging. Domestic companies, such as BAIC, have redesigned vehicles to implement a swapping solution focusing on the commercial sector. Hence, these factors are attributed to the increased uptake of battery swapping in this region.

Europe is expected to show good growth in the market due to the increasing development of battery swapping for compact city-oriented vehicles in Germany and Sweden.

In North America, increasing stringency of emission regulations in the U.S. and implementation of battery swapping model in key states, such as California (where Ample supports Uber EVs with five swapping stations), will support the growth of the market during the forecast period.

KEY INDUSTRY PLAYERS

High Capital Investment by NIO to Strengthen its Position as a Leading Player in the Market

NIO has adopted the swapping solution to differentiate its product and gain a competitive advantage among private customers. By 2020, the company installed 178 battery-swap stations in 64 different cities across China. Furthermore, NIO completed more than 700,000 swaps by the end of June 2020. As part of its NIO Power 2025 plan, the company aims to install 700 stations by the end of 2021. Hence, the full-fledged adoption of battery swapping, specifically in China, has enabled NIO to capture a larger market share.

LIST OF KEY COMPANIES PROFILED:

• ChargeMYGaadi (New Delhi, India)


• NIO, Inc. (Shanghai, China)


• Numocity (Karnataka, India)


• BAIC (Beijing, China)


• KYMCO (Kaohsiung City, Taiwan)


• Gogoro, Inc. (Taoyuan, Taiwan)


• Amplify Mobility (Telangana, India)


• Lithion Power Private Limited (New Delhi, India)


• Sun Mobility (Karnataka, India)


• Ample (California, US)


• Aulton New Energy Automotive Technology (Shanghai, China)


• ECHARGEUP (New Delhi, India)


• Amara Raja Group (Andhra Pradesh, India)


• Others

KEY INDUSTRY DEVELOPMENTS:

• April 2021 – Sinopec and NIO, Inc. launched the NIO Power Swap Station 2.0 at Sinopec's Chaoying Station in China. This is NIO's inaugural first under the NIO-Sinopec partnership and second-generation battery swap station, representing the launch of NIO Power Swap Station 2.0.


• June 2021 – Ample partnered with ENEOS to install battery swapping technology in Japan. The initial deployment will involve some last-mile delivery and passenger companies in Japan's fiscal year ending in March 2022.

REPORT COVERAGE

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The electric vehicle battery swapping market research report covers a detailed analysis of the industry and focuses on key aspects, such as leading companies, product types, and leading applications of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report delivers an in-depth market analysis of several factors that have contributed to its growth over recent years.

Report Scope & Segmentation