"Market Intelligence for High-Geared Performance"
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.
Request a Free sample to learn more about this report.
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.
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.
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.
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.
To know how our report can help streamline your business, Speak to Analyst
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.
Asia Pacific Electric Vehicle Battery Swapping Market Size, 2020 (USD Million)
To get more information on the regional analysis of this market, Request a Free sample
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.
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.
An Infographic Representation of Electric vehicle battery swapping Market
To get information on various segments, share your queries with us
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.
Value (USD Million)
By Service Type
By Vehicle Type
Fortune Business Insights says that the global market size was USD 100.2 million in 2020 and is projected to reach USD 641.0 million by 2028.
In 2020, the Asia Pacific market value stood at USD 70.1 million.
Registering a CAGR of 27.1%, the market will exhibit excellent growth during the forecast period (2021-2028).
The subscription model segment is expected to lead this market during the forecast period.
Electric vehicle battery swapping enables easier management for energy producers and transmission system operators (TSOs) to drive the market's growth.
NIO, BAIC, and Aulton are the major players in the global market.
Asia Pacific held the largest share in the market in 2020.
The elimination of upgraded costs for users compared to cable charging and exponential vehicle-to-grid benefits and increasing adoption of shared e-mobility trends, such as ride-hailing and rentals, are expected to drive the adoption of electric vehicle battery swapping during the forecast period.
“This report is really well done and we really appreciate it! Again, I may have questions as we dig in deeper. Thanks again for some really good work.”- U.S.-based biotechnology company focussing on treatment of chronic pain.
“Kudos to your team. Thank you very much for your support and agility to answer our questions.”- Europe-based provider of solutions to automate data centre operations.
“We appreciate you and your team taking out time to share the report and data file with us, and we are grateful for the flexibility provided to modify the document as per request. This does help us in our business decision making. We would be pleased to work with you again, and hope to continue our business relationship long into the future.”- India-based manufacturer of industrial and specialty intermediates with a strong global presence.
“I want to first congratulate you on the great work done on the Medical Platforms project. Thank you so much for all your efforts.”- One of the largest cosmetics company in the world.
“Thank you very much. I really appreciate the work your team has done. I feel very comfortable recommending your services to some of the other startups that I’m working with, and will likely establish a good long partnership with you.”- U.S. based startup operating in the cultivated meat market.
“We received the below report on the U.S. market from you. We were very satisfied with the report.”- UGlobal hearing aids manufacturer.
“I just finished my first pass-through of the report. Great work! Thank you!”- U.S. based solar racking solutions provider.
“Thanks again for the great work on our last partnership. We are ramping up a new project to understand the imaging and imaging service and distribution market in the U.S.”- World’s leading advisory firm.
“We feel positive about the results. Based on the presented results, we will do strategic review of this new information and might commission a detailed study on some of the modules included in the report after end of the year. Overall we are very satisfied and please pass on the praise to the team. Thank you for the co-operation!”- Germany based machine construction company.
“Thank you very much for the very good report. I have another requirement on cutting tools, paper crafts and decorative items.”- Japanese manufacturing company of stationery products.
“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”- One of the Leading Food Companies in Germany
“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”- Intuitive Surgical
“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”- Major Food Company in Japan
“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”- Ziering Medical
“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”- Major Manufacturer of Precision Machine Parts in India
“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”- Hewlett-Packard
“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”- Global Management Consulting Firm
“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”- UK-based Start-up in the Medical Devices Sector
“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”- One of the Largest Companies in the Defence Industry