In the weekly column we take turns writing about innovation and economic trends in Asia.
(Photo: Klawe Rzeczy)
Beijing From a distance, the large gray boxes in a parking lot next to Chaoyang Park in the center of Beijing are reminiscent of large car washes: an entrance ramp, behind which there is space for a car. But if you step closer, you can already hear the quiet roar of the ventilation system. Batteries are stored in two large boxes, with “Nio Power” written in large letters on the outside.
The provider of electric cars, which is also traded as “China’s Tesla”, is one of the first companies to offer its customers the option of simply replacing their vehicle’s battery within three to five minutes instead of charging it. According to the company, it has already set up around 700 such stations throughout China and replaced batteries more than a million times, making the company the market leader.
Competitor Geely wants to install 5,000 stations worldwide by 2025 – and promises that the replacement process for its stations will only take a minute. However, the entry of another company caused a stir: In January, the battery manufacturer CATL announced that it would invest in the technology. CATL is the absolute market leader in batteries in China and is considered the world’s largest manufacturer.
The company wants to set up exchange stations in ten cities across the country, and users should be able to access the service via an app. Initially, only one vehicle from the Chinese automaker FAW will be compatible with the service, but other models will be included in the future.
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European manufacturers such as BMW have so far been rather skeptical on the subject. Tesla had already experimented with battery replacement in 2013, but then did not pursue it. The company’s super-fast charging stations are fast enough, said company boss Elon Musk.
The Chinese electric car manufacturer is a pioneer in battery replacement.
(Photo: picture alliance/Gao yuwen – Imaginechina)
But what is not very common in Europe or the USA is currently enjoying great popularity in China. This is also due to government support for battery replacement stations. Battery replacement technology was explicitly mentioned in the government’s important work report last year. In October, the Ministry of Industry and Information Technology launched a new pilot program to support the construction of more than 1,000 stations.
>> More on the topic: China’s electric car manufacturers are flooding their own market
Analysts such as the rating agency Fitch expect a boom in technology in China due to government support. “We believe that the battery replacement model could drive demand for electric cars and batteries,” says a recent analysis by the company. Nio in particular puts its stations in the focus of its advertising campaigns and intends to expand in Europe as well.
In addition to saving time compared to charging, the simple replacement of the battery has another advantage: the car customer does not have to buy the battery, but can rent it – in different versions. This is intended to curb customers’ fears of not being able to keep up with technological leaps.
However, the technology and required infrastructure are anything but easy to handle. The batteries still take up a lot of space, as the example in Beijing shows. Experts are skeptical as to how sensible battery replacement really is, especially given that the range is ever increasing. In addition, the time it takes to at least partially charge a battery is already only around 30 minutes for some manufacturers anyway.
The Better Place company had been experimenting with battery swapping as an alternative to charging around the same time as Tesla, setting up stations notably in Israel. However, the company failed and disappeared from the scene.
One problem was apparently that only Renault had made its models compatible with the Better Place battery replacement station and other providers did not follow suit. But despite the disappointing experience, the French company is currently one of the few European automakers considering reviving the technology.
In the Asia Techonomics column, Nicole Bastian, Dana Heide, Martin Kölling, Mathias Peer and Sabine Gusbeth take turns writing about innovation and economic trends in the world’s most dynamic region.
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