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Oct 10, 2023

Is battery swapping the solution to EV charging woes?

As anxiety mounts over the capability of America’s electric vehicle chargers, an

As anxiety mounts over the capability of America's electric vehicle chargers, an alternative is emerging: batteries that pop in and out like the ones in a flashlight.

It's not a new idea. Battery-swapping stations have gained momentum in China, even after high-profile failures over the last decade in Israel and at Tesla Inc. Now, a San Francisco company is trying a new approach as the EV revolution begins in earnest.

Ample Inc., a small battery-swapping firm, is finding some success after a decade of toil. Last week, it identified its first automotive partner, a small EV maker called Fisker Inc. Ample is poised to get a $15 million grant in California to expand its small factory in the Bay Area and is busy arranging deals from Japan to Spain.

The proposition: replacing the battery, rather than recharging it, gets the car back on the road faster. It can require only minimal electrical infrastructure. Those are big selling points for gasoline stations that want to serve EVs and for the oil companies that are Ample's biggest backers.

"We’re not moving away from gas because it's inconvenient," said John de Souza, Ample's co-founder and president, in an interview. "It's for a lot of other reasons."

However, battery swapping is a radical departure from the way that automakers, investors and the government have planned for an EV future. So many decisions have been made and so many billions of dollars spent that it may be too late for the bulk of the industry to swerve away from the traditional EV plug and adopt something else.

"Is this really going to be something that can be mainstreamed? The easy answer is no," said Alan Baum, an independent automotive forecaster who focuses on EVs. "But there could be situations where you do small projects."

The auto industry is so large that bringing battery swaps to even relatively small corners is an opportunity. Doing so could accelerate the uptake of EVs in cases where a roadside charger isn't the best fit.

Fisker, for example, is focused on "ride-hailing and rental vehicle companies" in its partnership with Ample, the automaker said in an emailed statement. Those users have certain characteristics that are well suited for battery swapping: They drive lots of miles and stand to lose money if they can't fill up right away.

The notion of swapping batteries also has a certain appeal in a moment when the U.S. charging network appears to be advancing more slowly than EV adoption.

Electric vehicles are selling like hotcakes. Cox Automotive forecasts that Americans will buy more than 1 million of them this year, which would equate to more than 7 percent of all light-duty vehicle sales.

Meanwhile, chargers are arriving only slowly on roadsides, delayed by permitting and supply-chain hurdles, along with reliability problems.

Battery swapping is a simple and compelling concept that in practice has had some high-profile failures.

In the early 2010s, when electric vehicles were first entering the mainstream, a darling of investors and the media was a startup called Better Place. The company raised $1 billion on the idea that its stations, which replaced an EV's battery in five minutes, would replicate the speed and convenience of the gas station — and even at lower prices.

The project started in Israel, where gas prices were high and the prospect of retrofitting a small country seemed achievable.

But by 2013, Better Place was bankrupt. It had failed to persuade two key partners. Its technology was tried out by only one automaker, Renault. And it hadn't convinced drivers, who had to wrap their heads around the odd idea of owning a car but not its most expensive component: the battery.

"The model requires a leap of faith on the part of the customer, and many were unwilling to take that leap," John Gartner, at the time an automotive consultant, told The Guardian.

Two years later, the world's leading electric automaker, Tesla, dipped a toe into battery swapping. It built a single battery-exchange station between San Francisco and Los Angeles, but the response was tepid.

"Clearly, it's not very popular," CEO Elon Musk said on a call with investors that year. "It's just — people don't care about pack swap."

Meanwhile, battery swapping is finding a home in China.

Nio Inc., a Chinese electric automaker has taken the lead. William Li, the founder and CEO, said on a call with investors in March that Nio had installed more than 1,300 swapping stations and planned to get to 3,000 stations by the end of this year. Another Chinese automaker, Geely Automobile Holdings Ltd., is also rapidly building swap centers.

Nio says the approach has allowed it to significantly cut vehicle prices "because the battery service is decoupled from the sale of the car." However, the financial responsibility reappears for the vehicle owner in the form of a subscription to the battery service.

Ample's approach is different from what others have tried.

For Better Place, Tesla and Chinese automakers, the approach has been to replace the entire battery, a massive block that can weigh thousands of pounds. Ample has designed smaller, modular batteries that could either restore the whole battery or just a section of it, depending on how much range the vehicle needs.

The company replaces batteries via an automated system. When an EV parks in a stall at an Ample station, spent battery modules are unscrewed from the vehicle and replaced with charged ones. The empties are shuttled to a large adjoining cabinet, where they are shuffled and recharged.

Ample said this approach can make the electrical footprint of its stations far smaller. That means they can be installed cheaper and faster.

One of the biggest impediments to today's high-powered charging stations is that they can require the electric utility to install beefier wires, which are expensive and built slowly.

Ample banks lots of battery modules in its cabinet, and they sip power when it's available. De Souza, the company's co-founder and president, said one station can require 100 kilowatts of power. By comparison, the highway charging plazas that the Biden administration is funding on the nation's interstate highways as part of the 2021 bipartisan infrastructure law each require at least 600 kilowatts of power.

Support for Ample's approach is coming from government. In February, the California Energy Commission offered Ample a conditional $15 million grant to expand its small factory near San Francisco. The commission could finalize the funds as soon as Wednesday.

The United States, however, is not battery swapping's only market.

De Souza said Ample just won a €10 million grant from Spain's government to deploy its system there. When E&E News interviewed de Souza late last week, he was in Dubai, United Arab Emirates, on his way from business meetings in South Korea to another set of meetings in Spain.

"We need to be able to go through and solve it in all the places where government are serious about solving it," he said, speaking of who might provide support for Ample's approach to replenishing EV batteries.

Today, Ample says it operates a dozen stations in the San Francisco Bay Area and that together they get hundreds of visits by Uber drivers every day. None of those Uber drivers appears to have shared a video of the experience on YouTube. The only footage on YouTube of Ample stations is in TV news clips that feature the company's executives.

The company is backed by corporations with deep pockets, including major oil companies in Japan and Thailand, as well as Shell Ventures, the arm of the the British oil giant that seeds young companies. Ample, founded in 2013, has raised more than $290 million, according to the finance-tracking site Crunchbase.

Oil companies are interested, de Souza said, because Ample's approach is a sort of drop-in replacement for a gas station that wants to serve EVs. And that is exactly the market that Ample is seeking.

"They have tried fast charging," de Souza said of gas stations, "and they are familiar with the limitations."

It is unknown to what extent automakers and other actors in the emerging EV industry are willing to cooperate with a company like Ample in order to speed up the charging experience. Moving to a battery-swapping model would require all parties to rethink their strategy.

Just about every characteristic of an EV's battery — its shape, its location in the vehicle, its design and its chemical formulation — differs among automakers and even between an automaker's individual models. The centrality of the battery to the EV means its details are key company secrets.

The battery itself is also being integrated in ways that could resist removal. For example, in pursuit of efficiency, Tesla is now designing its cars with battery as an integral part of the vehicle's structure. Working with Ample demands that the automaker turn that strategy on its head.

The carmaker would have two options: hand over battery development to Ample, or work with the startup to divide up its battery block into Ample-formatted modules.

This kind of disruption has already occurred — at a very small scale — at Ample's stations in California. There, the electric vehicles that use the swapping stations have had their factory-installed batteries removed and replaced with Ample's. The cars are owned by Sally, a startup that rents electric vehicles to ride-share drivers.

Ample's strategy is such an outlier to current vehicle trends that analysts are skeptical.

"The many challenges to standardize on battery swapping for the light duty U.S. consumer market are so significant as to make it infeasible for any large scale [original equipment manufacturer] to attempt switching," said Gartner, the former automotive consultant who is now a director of research at the Center for Sustainable Energy, which manages EV rebate and incentive programs for states, in an email.

For its part, EV maker Fisker said its incorporation with Ample is not disruptive.

Fisker is creating small batches of its first EV, the Ocean, in partnership with contract manufacturer Magna International Inc. at a Magna plant in Austria. Only a limited number will be equipped for battery swapping.

"Swappable batteries with Ample is an add-on to our current business plan," Fisker said in its emailed statement, and "requires no changes to the design and engineering."

The battery-swapping model could also be disruptive to another heavyweight that has put its chips on incumbent technology: the U.S. government.

The Biden administration has made traditional EV charging — at roadside stations, where drivers refresh their batteries by plugging in — the centerpiece of its $7.5 billion plan to foster a U.S. EV-charging industry. Passed as part of the bipartisan infrastructure law, the first phase of the plan is to build traditional high-speed chargers at 50-mile intervals along interstate highways.

Those chargers are designed to take perhaps 20 minutes to get a battery to 80 percent full. That is much slower and less full than the 100-percent-full batteries Ample says it can deliver in just a few minutes.

The federal investment has stimulated a wave of investment by companies that build traditional chargers and other players, like Walmart Inc., which last month said it would build thousands of charging stations at its stores by 2030.

"Is private equity going to make money available to [swapping]?" asked Baum, the auto forecaster. "Probably not, when it's probably a better bet to be in on the charging infrastructure."

Correction: An earlier version of this story misstated the number of vehicles that Cox Automotive estimated would be bought by Americans this year.