China’s NIO wants to spread EV battery swapping to Europe

Illustration: Nio

The dark electric SUV automatically backs into something resembling a small car wash. The floor opens and a robot automatically replaces the battery in the bottom of the car with a new, fully charged one. The whole process only takes five minutes.

This is how Chinese EV manufacturer NIO wants convince us that there is a future for EV battery swapping on European roads. NIO’s battery swapping will also introduce BaaS, i.e. “Battery as a Service”, and according to the people behind NIO, this will bring down the price of the electric car itself and thus help to accelerate the transition to electric cars.

It might remind you of something you have seen before. The Israeli tech company Better Place had from 2007 until its bankruptcy 2013 tried to get, initially, Danes and Israelis to embrace battery swapping as a gateway to carefree electric car ownership and unlimited reach.

Tesla also for a short period considered whether battery swapping was the way forward. However, the idea was dropped in 2014.

Now that same idea has become very concrete with China’s NIO’s recent announcements of expansion to Europe. Much has changed since investors, including the Danish government with about DKK 250 million, watched Better Place’s vision of a large European network of battery swapping stations go down the drain.

Today, NIO already has more than 700 battery swapping stations in China and had performed over 5.3 million battery swaps by the end of September 2021. So the company is not presenting untested technology to Europeans.

The first station has been inaugurated in Oslo, and 200 Norwegians have already bought the NIO ES8 model, which was designed with battery swapping in mind.

In November, NIO opened the first battery swapping station in Europe. It took place in Norway, where NIO has so far sold 200 ES8 cars. Illustration: Nio

Battery lease

Interestingly enough, 184 of the buyers have chosen the BaaS model, and NIO believes this will spread further.

Gert-Jan Geerinckx explains this to us over a Zoom meeting. He is responsible for NIO Power in Europe, which handles the entire charging segment of the electric cars. There is a special reason for NIO investing in battery swapping:

“We know that the purchase price for new electric cars is still a constraint on the green transition. But by leasing the battery, we can make it more economically attractive to own and drive an electric car. On top of that, we as a manufacturer can handle the sustainability of the battery itself in a more optimal way—this applies both to charging in the swapping station, when the battery can no longer be used in electric cars, and when it’s ultimately to be processed into raw materials.”

Gert-Jan Geerinckx acknowledges that the story of Better Place is not the best advertisement for battery swapping, especially not in Denmark. But he and his colleagues from NIO emphasize several times that it was not the very idea of battery swapping that was wrong, but that it was the technology and the timing.

This is especially visible in Renault’s cars, which in their time could swap batteries and were built somewhat differently than the new NIO cars. At the time, the battery (22 kWh) was placed as a large block behind the back seat. This meant that the trunk was very small and the seats could not be folded down.

New generation of electric cars

NIO’s new models, including the ES8, are all equipped with batteries mounted on the bottom of the car. This is a model commonly called a “skateboard”, and it is used by all major EV manufacturers today.

New top model from NIO called ET7 will further boost sales of the Chinese brand in Europe. The model has the option of battery swapping, but is also available with a range of up to 1000 km. Illustration: Nio

Therefore, NIO also sees their battery swapping solution as a completely new generation of technology compared to Better Place. This is explained by Hui Zhang, vice president and head of NIO Europe:

“Today, many things are different from how they were 10 years ago. Better Place focused on being a 3rd party battery swapping provider. They didn’t have their own cars. Of course, it also had something to do with the prevalence of electric cars and customers’ understanding of electric cars at the time. But without your own product and without a high acceptance of electric cars, customers can’t understand the possibilities that lie in battery swapping. But fortunately, we can combine the two parts—the cars and the battery swapping. Since we started in 2016, we have been very much alone in offering battery swapping. It also has a lot to do with new technology like mobile internet, which was not available when Better Place started. We run all communication via apps today. Our battery swapping stations are also much smaller than Better Place’s and therefore easier to integrate into an urban environment.”

Now that NIO is the only one to offer battery swapping in Europe, do you not risk ending up in the same situation as Better Place, with customers not having enough choices available?

“NIO is on a mission with battery swapping. You could look at it in this way: most people only drive 35–65 km in their car every day, but still we know that many customers have range anxiety because they want to drive from Copenhagen to Lake Garda twice a year, and therefore they hesitate about buying an electric car. So we say, how can we offer a solution with an alternative. Therefore, we believe that battery swapping is a unique ‘selling point’. Tesla has their Superchargers and the German manufacturers have joined forces to create the IONITY charging network. Everyone is trying to make electric cars more accessible. We know that the vast majority will charge at home. In China, it’s 75 percent. But with battery swapping, we offer an extra option. We have also chosen to offer our technology and infrastructure to other car manufacturers.”

In addition to the infotainment technology and the integration of mobile phones in electric cars, charging is considered one of the crucial sales parameters for electric cars. If others start using your technology, do you not risk losing it?

“It’s about creating a broader ecosystem, and NIO is leading the way here. In China, we can see that more and more manufacturers are interested in battery swapping, including Geely and BYD. Battery cell manufacturer CATL will also offer battery swapping. It just shows that everyone is trying to create their take on the transition from internal combustion engine to electric cars by offering different options to make the experience more convenient. We believe that battery swapping is an additional option for customers, which can make the transition from internal combustion engines easier.”

By the end of 2025, NIO expects to have 4000 battery swapping stations in operation, of which 1000 are expected to be located outside China.