Will battery swapping replace fast charging for electric vehicles?

9

October

2022

4.5/5 (2)

While popular carmakers producing electric vehicles (EV) such as Nissan, Tesla or BMW are focusing on how customers can charge their cars in a faster and more seamless way, new entrants in the market are pushing another method to give EV their charge. Founded in 2014 in Shanghai, China, NIO is a car manufacturer specialising in EV (Wikipedia, 2022). Nio is known for developing an alternative to the charging stations: the swapping stations. In December 2021, NIO had more than 700 swapping stations throughout China, which provided more than 5,3 million battery swaps in total (NIO, 2021). The principle of these stations is simple: when an NIO owner arrives at the station, the car parks itself on the swapping location, the battery is swapped within 3 minutes and the driver does not have to come out of the car during the whole process. The business model behind this technology was named by NIO as “Battery as a service”. The car can be bought without a battery, leading to a cost reduction of around 10.000 USD. The customer can then pay per swap or take a subscription that will include a certain number of swaps in a month.

But is this technology better than the existing fast-charging possibilities?

Battery swapping comes with advantages, but also a set of drawbacks.
First of all, the main advantage of this technology is the waiting time for the user. While a full charge for a Tesla at a Tesla Supercharger takes around 25 to 30 minutes (Cline, 2022), a battery swap usually takes between 3 and 5 minutes. A report by McKinsey showed that the waiting time for the charging process was one of the barriers to the adoption of EVs (Heineke et al., 2020). Additionally, this short time required for swapping a battery allows for more efficiency, which would be ideal in congested areas. The second advantage is economic. In swap stations, batteries can be charged when the cost of electricity is lower, making it more cost-efficient. Thirdly, this service can enable easy battery upgrades when a more advanced battery is available. This can help preserve the car’s performance, but also resale value.
On the other hand, battery swapping brings the problem of battery standardization. Not all batteries are the same size, and not all carmakers are willing to standardize their battery size among their models. Moreover, always having charged batteries at the swapping stations require the manufacturers to produce far more batteries than cars, increasing the pressure on the finite supply of resources required for their production.

To conclude, it is still unclear whether battery swapping can achieve better economical, ecological, and practical performance than fast charging. Both methods have great opportunities, but they both require important development. As the BaaS model is increasingly important in China, it will be interesting to follow its performance closely, to understand where and how the swapping stations can play a role in the new EV charging network. It is easy to imagine a coexistence of these two systems, where battery swapping could benefit professional usage, and where charging stations would be used for the regular commute.

References:

Cline, A. (2022, July 22). How Long Does It Take to Charge a Tesla at a Charging Station? MotorBiscuit. Retrieved October 9, 2022, from https://www.motorbiscuit.com/how-long-does-take-charge-a-tesla-charging-station/

Heineke, K., Holland-Letz, D., Kässer, M., Kloss, B., & Müller, T. (2020). ACES 2019 survey: Can established auto manufacturers meet customer expectations for ACES?

NIO. (2021, December 10). NIO Achieves Annual Target of 700 Battery Swap Stations Ahead of Schedule | NIO. Retrieved October 9, 2022, from https://www.nio.com/news/nio-achieves-annual-target-700-battery-swap-stations-ahead-schedule?noredirect=

Wikipedia. (2022, October 9). NIO (car company). Retrieved October 9, 2022, from https://en.wikipedia.org/wiki/NIO_(car_company)

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From pandemic to chip shortage – will the automotive industry recover?

9

October

2021

5/5 (2)

Hopes of recovering lost sales and growth opportunities after the pandemic have not been so optimistic for the automotive industry. Among the many devastating effects of the pandemic, the semiconductor chip shortage is one which has affected a wide range of industries significantly. This shortage was a combination of a lack of demand and production during 2020, and a resulting bottleneck in the chip manufacturing process. This post will zoom into the effects of the shortage on the automotive industry, which has been suffering profoundly.

Semiconductor chip manufacturing

Semiconductor chips are made of silicon and are used to power electric devices. They are virtually everywhere, and in most electric devices you use. The production of semiconductor chips and building the fabs for producing them is extremely expensive and time consuming. Suppliers of chips need to earn a minimum of $3 billion in profits for each fab to be able to generate money, and this has been difficult following the pandemic and its economic consequences. With regards to time constraints, chip manufacturing takes over 3 months. As such, combining the complexity, time, and financial costs of producing semiconductor chips, the shortage has been extremely difficult to face and will take years to overcome.

Chip shortage in the automotive industry

In terms of the automotive industry, semiconductor chips are essential components in the car manufacturing process. These are vital for car features like emergency braking systems.

The chip shortage’s expected costs in 2021 for the automotive industry are $210 billion because of slowed production, much longer lead times and the postponement of new product launches (the forecasted effects of the shortage in 2021 as a whole almost doubled from May to today according to CNBC). These devastating effects are only expected to subside by 2023, when there is expected to be an overcapacity of semiconductor chips.

How has this affected demand and supply?

On the demand side, customers are more willing to wait until the shortage subsides to purchase vehicles. Further, they are more likely to switch between car manufacturers depending on who can satisfy their demand first. This has strongly influenced the role brand loyalty plays in the automotive industry and has also led to individuals moving towards the used car market. Following the pandemic, demand has also risen naturally, and this has been met with reduced supply in the automotive industry.

On the supply side, car manufacturers are starting to look at leaner and more efficient production processes. Make-to-order models are becoming more popular as car manufacturers navigate the chip shortage. This could be an interesting development for the future of car manufacturing post-shortage. Further, car prices are seeing an increase.

The shortage of semiconductor chips has highlighted how the pandemic has influenced the economy in profound ways. Further, it indicates the vulnerable balance between supply and demand forces and it will be interesting to see how and if car manufacturers will overcome the effects of the shortage and make it to 2023.   

References:

https://www.cnbc.com/2021/09/23/chip-shhttps://open.spotify.com/track/1jy7SkRcmBCTcv4ZMtwz29ortage-expected-to-cost-auto-industry-210-billion-in-2021.html

https://www.cnbc.com/2021/09/23/chip-shortage-expected-to-cost-auto-industry-210-billion-in-2021.html

https://www.bloomberg.com/graphics/2021-chip-production-why-hard-to-make-semiconductors/

https://driving.ca/auto-news/industry/report-half-of-new-car-buyers-planning-to-wait-out-semiconductor-chip-shortage

https://eu.freep.com/story/money/cars/2021/06/15/car-chip-shortage-2021/7688773002/

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What´s up automotive industry?

10

September

2019

5/5 (3) The automotive industry is currently in a vast turmoil, thus nobody is able to predict the future as well as to forecast which technologies will have the biggest impact on the automotive industry. Nevertheless, it’s inevitable that a technological wave is disrupting the industry and car companies are forced to react (Blackman, 2019). Besides providing a brief glance on the most impactful changes in the automotive industry, I would like foster a vital discussion, asking for your opinion on the most important technologies and the future of the automotive industry.

First, passing by the technology of electrified cars is impossible when analyzing the current automotive industry. It is more than just it`s propulsion technology but rather a step towards cleaner roadways and carbon reduced emissions. Therefore, it comes by no surprise that sales of electric cars are peaking at around 5.1 million cars in 2018 (IEA, 2019) , while being at around 200 000 in 2013 (Kane, 2016). Moreover the rise of importance is underlined by the fact that electric vehicles will amount up to 35% of all global new car sales by 2040 (Bannon, 2016). Secondly, the invention of vehicles that are not in need of any human intervention is called autonomous driving. To my mind the impact for the future of the automotive industry are tremendous as the list of advantages are endless. For example, traffic death could be reduced by around 90% or 60% less carbon emissions due to reasons as decreased traffic congestions and increased efficiency of fuel use (Goldin, 2019). Last but not least, the interconnectivity between cars and/ or with traffic infrastructure could create increased revenues, reduced costs, boosted safety and create value opportunities of around 750$ billion until the year 2030 (Bertoncello, Husain and Möller, 2018). Furthermore, advantages are seen in time-saving and increased productivity as accident alerts, traffic conditions and live route optimisation including shorter routes are available (Fernandez, n.d.). Additionally, interconnected cars increase the safety standard as they are able to communicate with road infrastructure or other cars. Therefore, there are forecasts which predict that there will be 380 million connected cars by 2021 and a new ecosystem in the automotive industry. Wait … a new ecosystem?

Of course, electrification, autonomous driving and interconnectivity are shaping the car industry as just a few technologies ever did before. But are those the most impactful changes to the automotive industry? To my mind those technologies are “only” the enhancers for something that is bigger than those technologies – a new ecosystem in the automotive industry which is boosted by interconnection, automation, electrification and smart algorithms. It´s not about selling cars anymore, but rather about cooperating with new partners in order to deliver the best, most convenient and sustainable mobility service for a new generation of high demanding customers. What are your thoughts – are those really the most important technologies at the moment? And are the technologies just the enhancers for the new ecosystem or is the new ecosystem just an overrated buzzword?

References:

Bannon, E. (2016). E-vehicles to be 35% of sales by 2040 thanks to falling battery prices | Transport & Environment. [online] Transportenvironment.org. Available at: https://www.transportenvironment.org/news/e-vehicles-be-35-sales-2040-thanks-falling-battery-prices [Accessed 10 Sep. 2019].

Bertoncello, M., Husain, A. and Möller, T. (2018). Setting the framework for car connectivity and user experience. [online] McKinsey & Company. Available at: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/setting-the-framework-for-car-connectivity-and-user-experience [Accessed 10 Sep. 2019].

Fernandez, T. (n.d.). 6 Key Benefits of Adopting Connected Car Technology | Autotrip. [online] Autotrip. Available at: https://autotrip.com/connected-car-technology-benefits/ [Accessed 10 Sep. 2019].

Goldin, P. (2018). 10 Advantages of Autonomous Vehicles | ITSdigest. [online] Itsdigest.com. Available at: https://www.itsdigest.com/10-advantages-autonomous-vehicles [Accessed 10 Sep. 2019].

IEA (2019). Global EV Outlook 2019. [online] Available at: https://www.iea.org/publications/reports/globalevoutlook2019/ [Accessed 10 Sep. 2019].

Kane, M. (2019). Plug-In Electric Car Sales Visualized From 2011 to 2015. [online] InsideEVs. Available at: https://insideevs.com/news/329358/plug-in-electric-car-sales-visualized-from-2011-to-2015/ [Accessed 10 Sep. 2019].

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Google Maps will now help you find a parking space

11

September

2017

No ratings yet. When you head away on your travels, it is always recommended to hire a car to find the best locations and get away from the tourists. But, hiring a car and driving around a new city can be time-consuming and stressful when you look for a location to park your car.

I am not sure about everyone else, but we have a tendency to over-rely on incredible Google Maps and/or Waze when travelling as both apps will direct you to your destination, usually offering the quickest method available, whilst you focus on your driving.

The latest Google Maps will now find parking spots along the way to your ultimate destination. It’s as simple as selecting “Find Parking” and, whilst you drive, Google will offer you various parking options and you can pick or choose, depending on how close you are to your final point.

Google is now becoming a major contender when it comes to location-based solutions. While having Waze, Google Maps, Urban Engines, and together with its autonomous driving technology (which will probably be available in the upcoming years) it seems like they have the ability to disrupt the Automotive industry. However, the Mobility-as-a-service market is still not profitable.

Uber and Google are still not making money by offering mobility services such as Waze, Maps, or ride-hailing services. Yet, they do disrupt a whole industry which used to be very strong for over four decades.

Uber is a like a “Mack Truck just rolling down the street gaining speed,” said Magid Advisors President Mike Vorhaus on CNBC’s “Fast Money” this week. “So I do think we’re eventually going to see this in the numbers of auto sales.”

These tech giants understood that when cars will become electric and autonomous (and probably cheaper as well), there will be a huge gap in the middle to provide mobility services packages. Same as the Smartphone revolution. The automotive manufactures know that there is a big “storm” coming ahead and are making the right changes to become competitor in this field. But there is a question which still stands – How can companies like Toyota, BMW, Mercedes-Benz and General Motors, who are experts when it comes to metal and oil, will compete in the unknown territory of IT against Google, Uber and others tech giants?
After disrupting the Internet,Mobile, Music, Video, Gaming, Navigation, Mapping, Operating systems and many other industries – Google is planning to do it again to the Automotive industry.

 

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Is Tesla finally getting serious competition?

24

October

2016

5/5 (2) For years we are talking about the ‘real’ breakthrough of electric vehicles. However, the large and established car manufacturers are far behind Tesla Motors since the introduction of their Model S in 2009 and Tesla has new, even better models that are on their way.
The Paris Motor Show, that took place from the 1st till the 16th of October this year, showed us that a transition in the automotive industry is happening and competition for Tesla is getting bigger and more serious with every new model being introduced to the market.

Paris Motor Show has finished, and most of the new vehicles and concepts introduced by the biggest automotive players were hybrid or full electric. Volkswagen, Opel and Mercedes showed they are seriously working towards manufacturing electric cars that can drive >300km with a full charge, which now is only possible with a Tesla Model S.

Volkswagen was recently involved in the large emission scandal that shocked the world. Now, it’s time to clean up their act. ‘Our future is electric’ says Herbert Dies, the CEO of Volkswagen Passenger Cars. Volkswagen introduced the Volkswagen I.D., a concept car that is in the same class as the popular Volkswagen Golf. The I.D. has a range of 400 to 600 kilometers dependent on what battery the buyer chooses, but the launch date is set to 2020.

Mercedes showcased the Mercedes Generation EQ, a concept car that will not be produced, but it does show that Mercedes is capable of manufacturing batteries that can make cars drive a range of 500 kilometers.

Unlike Volkswagen and Mercedes, Opel did not showcase a concept car. Opel showcased the Ampera-e, a European version of the Chevrolet Bolt. With a range of 500 kilometers on a single charge, the Ampera-e is one of the best electric vehicles yet to date. Also, the Ampera-e makes use of regenerative technology that Tesla cars also use. This is a technology that makes it possible to regenerate energy while running.

Looking at the cars and concepts presented at the Paris Motor show, we can conclude that big automotive players are serious about electric vehicles and that electric vehicles are the future. Tesla did not have serious competition until now but it seems like the time has come to face serious competition. We will have to wait to see how big automotive players will attack the well-established position of Tesla in the electric vehicle industry.

 

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