Comprehensive analysis for battery swap electric cars industry

Battery swap electric cars industry business model

Compared with charging services with higher commercial maturity, the business model of battery swap services is still in the stage of exploration and innovation. The commercial nature of battery swap electric cars service is: separation of car and battery, battery leasing.

When purchasing battery swap electric cars, consumers give up battery ownership as a condition to save a lot of battery purchase costs, and later use electric vehicles by renting batteries. When the vehicle needs to renew its energy, the owner will drive the car to the battery swap station for battery replacement, so as to achieve the purpose of renewing the energy of the car.

The profit of the swap station operator mainly comes from the difference in service fees and electricity charges.

C-end business model: The monthly package model is mostly used, and the battery rental fee and the limited number of battery replacement fees are included in the package price. Compared with profiting through battery replacement, C-end battery swap station is more like a car purchase derivative service provided by car companies for consumers, and it is also a differentiated marketing tool for car companies.

Since the battery swap electric cars are generally signed at the car purchase stage, the profitability of the battery exchange station is mainly affected by the sales volume of the battery exchange model. Therefore, compared to the refined operation based on the swap station, actively promoting the advantages of swap models, increasing users’ acceptance of swaps, and encouraging more consumers to choose swap models is the main way to improve the profitability of C-end swap stations.

B-end business model: Most of them sign agreements with urban operating vehicle companies, which are divided into two ways: monthly package charging and charging according to the degree of battery replacement (mileage). Battery swap electric cars generally have a high demand for battery swap.

The base number of battery swap electric cars in the same city will largely determine the profitability of the city’s B-end swap stations. At present, in cities with a high usage rate of battery swap electric cars, some battery swap stations can achieve profitability.

Battery swap electric cars industry chain analysis

The battery swap industry chain consists of upstream power exchange construction, midstream power exchange operation, and downstream terminal consumption.

The upstream of the battery swap industry chain is composed of battery suppliers, basic component suppliers of battery swap stations, and supporting charging system suppliers. They are respectively responsible for providing power batteries, swap station equipment, software systems, etc. corresponding to the scope of application. After several technical iterations, most manufacturers have been able to provide complete sets of swapping station equipment.

The midstream is mainly battery swap electric cars manufacturers, operators and battery banks. battery swap electric cars manufacturers and operators are responsible for the construction and operation of battery swap stations, and provide battery swap services to the market. The battery bank conducts centralized management and leasing of batteries, and builds a battery bank ecosystem.

The downstream is mainly composed of battery exchange service users and power battery recyclers. At present, B-end users such as commercial vehicles and taxis have a stronger demand for battery exchange models.

Policy environment analysis of battery swap electric cars industry

With the rapid popularization of new energy vehicles, China is also keeping up with the development trend of the times and providing comprehensive policy support for the healthy development of the battery swap electric cars industry. Since 2020, various departments in China have successively issued policies aimed at guiding and supporting the development of the battery swap electric cars industry.

These policies and measures have greatly promoted the development of the battery swap electric cars industry, and laid a solid foundation for the industry to further improve service quality and promote environmental protection and energy conservation.

Analysis of the development status of the battery swap service industry

Two-wheeler battery swapping service industry

Electric two-wheeled vehicles have become an indispensable infrastructure for industries such as express delivery and instant delivery. With the growth of the shared motorcycle industry and the takeaway delivery industry, the electric two-wheeler battery swap industry is also gradually growing. The entire market is subdivided into three major sectors: the battery swap system market, the battery market, and the operation market.

It is estimated that by 2022, in China’s two-wheel and tricycle battery swapping service field, the market size of battery swapping cabinets will reach 260 million RMB, the battery market will reach 2 billion RMB, and the operating market will reach 18.4 billion RMB. This is a market with great potential, and it will develop rapidly in the future.

Battery swap electric cars service industry

In recent years, the charging mode has faced many problems, which has also brought great resistance to promotion. However, the policy has recently undergone a positive change in the attitude towards battery swap, and successive documents have been issued to encourage the application of the battery swap electric cars model. This change in attitude has also given birth to the accelerated layout of all parties for the construction of power stations.

Analysis of industry barriers of battery swap electric cars

Capital barrier analysis

The initial infrastructure investment cost of the swap station is relatively high, and the continuous wear and tear of the swap battery requires companies to continuously invest large sums of money. Enterprises without certain capital accumulation or support will find it difficult to participate in fierce market competition. Therefore, there are certain financial barriers in the battery swap electric cars industry.

Analysis of technical barriers

Operators usually need to independently develop a complete set of mobile energy products including battery swap stations, battery swap modules, battery swap electric cars, charging ports, standard battery packs, etc., to form a complete product matrix + service solutions, and build the company’s core competitiveness.

If the independent development cannot be completed, the operator needs to invest in the purchase of finished swapping stations and battery packs from a third party to carry out related businesses, and the market competitiveness is relatively low. Therefore, there are certain technical barriers to enter the mobile energy industry.

Cost barrier analysis

A major barrier to competition among operators of investment-heavy projects is the operator’s ability to use leverage and the cost of borrowing funds. That is to say, under the same utilization rate of the battery swap electric cars, the lower the capital cost, the higher the leverage ratio, and the higher the ROE.

Regional barrier analysis

Battery swap electric cars operators can take advantage of the first-mover advantage to seize the advantageous location and become one of the core barriers for subsequent operations. Moreover, the investment-heavy attributes of power station replacement greatly reduce the probability of repeated investment in the same location.

Analysis of the competitive landscape of the battery swap service industry

Two-wheeler battery swap service industry

China’s two-wheeler battery swap service market is experiencing many problems. A series of problems, such as heavy assets and difficulty in making profits in the short term, cultivation of user habits, exploration of business models, and inconsistent battery standards, all need to be resolved urgently.

At present, the top 10 two-wheeler battery swapping companies in China mainly develop the B-end market of electric two-wheeled vehicles to solve the electricity demand of instant delivery industries such as takeaway and express delivery. The two-wheeler battery swap market is still in the initial stage of development, and there is sufficient competition among companies, and there is no one or a few dominant oligarchy.

Electric vehicle battery swap service industry

Due to the differences in battery specifications produced by different manufacturers, the battery swap electric cars can only reach convergence in certain types of vehicles, including taxis, online car-hailing vehicles, and logistics vehicles. Enterprises that provide battery swap need to reserve a variety of battery models for battery swap electric cars. Coupled with the huge investment in building and replacing power stations, there are fewer companies involved.

Analysis of the development trend of the battery swap industry

Policy becomes a powerful driving force

Positive promotion: the development of the battery swap industry has entered a policy dividend period, and many departments in China have actively introduced relevant support policies for battery swap. Reverse force: the upgrade of emission standards will promote the electrification of heavy trucks.

In the future, the joint implementation of both positive and negative policies will inevitably promote the vigorous development of the field of battery swap electric cars.

The development of the heavy-duty truck battery swap market is accelerating

Driven by the dual-carbon policy, heavy truck manufacturers followed the trend and actively transformed and developed new energy heavy trucks.

It can be seen that new energy heavy trucks have ushered in a period of product explosion, and battery replacement heavy trucks, as a mainstream model, will also carry out continuous performance upgrades to enhance product strength. New energy heavy trucks have a higher penetration rate in areas with strict environmental protection and suitable promotion scenarios.

Looking forward to the future, there is still sufficient room for development in high-penetration areas to deploy heavy-duty trucks. At the same time, with the increase in infrastructure facilities, the number of heavy-duty trucks in low-penetration areas with suitable scenarios will also increase rapidly.

Charging and swapping batteries in parallel

Although the battery swap mode has many advantages compared with the charging mode, the charging mode itself has a first-mover advantage in the market and has formed a relatively stable audience. Moreover, even if the battery swap mode ushers in explosive growth during the “14th Five-Year Plan” period, its market size is still small compared to the charging mode, and it is impossible to completely replace the charging mode in the short term.

At the same time, the technology related to the charging mode is also continuously developing and maturing. After this mode breaks through the technical bottleneck and achieves obvious technical achievements, its defects will be greatly improved and recognized by consumers.

Therefore, for a long period of time, battery swap electric cars, especially the passenger car market, will be in a situation where charging and swapping coexist. The mutual complementarity of the two can provide strong support and guarantee for the healthy development of the entire heart energy vehicle market and industry.