23 May 2022 |

Battery swapping at scale

By Nick Van Osdol

Chinese swapping station

SWAP MEET

I’ve spent the past couple of weeks in the city I grew up in, Mountain View, California. The number of Teslas per capita in this city is off the charts. When I walk around the block to try and cure my writer’s block, it seems like every third driveway has one. Some have two. If you go anywhere around town, you can expect to lose track trying to count all the Teslas you see.

This electric vehicle adoption has been remarkable over the past 5-10 years. After all, those vehicles translate to a lot of displaced gallons of gasoline!

However, Mountain View looks a lot different from most places where people reside across the country.

Firstly, there’s a question of household income and whether people can afford an electric vehicle, most of which come with a sticker price well above $40,000.

Secondly, if you’re like me, you spend most of your time in a home where you can’t easily plug in an EV to charge.

Further, if you use a vehicle for your job in any capacity, even as charging times improve, the 1-2 hours you’d need to spend to charge comes with a real opportunity cost. If you’re driving for Uber, making Doordash deliveries, or providing services to different clients in succession throughout the day, that time is, quite literally, money.

All of this is to say that the charging we’ve come to think of synonymously with electric vehicles doesn’t work for everyone. It only really works well for a small subset of people.

Finally, beyond implications for consumers, the EV charging infrastructure being built out in the US today has significant implications for existing and future energy infrastructure.

AN AMPLE ALTERNATIVE

Today, we’ll take a deep dive into Ample. Ample makes battery swapping technologies and the infrastructure to support it at an increasing scale.

Battery swapping refers to a method of recharging EVs in which you swap a vehicle’s battery or batteries out of the car for fully charged ones, as opposed to recharging the same battery within a car.

Two weeks ago, I had the pleasure of touring Ample’s facilities in person and interviewing Levi Tillemann, Ample’s VP for Policy and International Outreach. In laying out Ample’s raison d’etre, Levi painted a similar picture to the one I opened with:

One of Ample’s fundamental theses is that the way we have configured our EV system in the US [it] only serves a minority of Americans, namely affluent suburbanites with a garage. EVs don’t work well for people who live in multi-unit dwellings, park in public garages or the street, drive long distances, and fleets that would need a massive amount of EV charging infrastructure. I have an electric car, and I have to use public charging infrastructure. And it sucks.

Battery swapping offers an alternative with a whole host of benefits, including:

Speed: Swapping batteries out is faster than recharging. You could recharge the batteries for any small device you use too. If you do – great! Many people don’t however. They swap in new AA or AAA batteries whenever the old ones run out of juice. It’s easier.

Modularity: Battery swapping technology can theoretically be integrated with any EV. Ample makes smaller, modular battery pack units to make it easier to serve any size vehicle. Need more battery capacity? Add more battery packs.

Accessibility: Given available battery swapping stations, electric vehicle owners wouldn’t need to rely on at-home or public charging infrastructure. They could pull into a swapping station much like a gas station and be on their way in 5 minutes.

The grid: At scale, managers of battery swapping stations can optimize when they recharge their batteries to coincide with periods during which grid demands are low.

I’ve curated highlights from my conversation with Levi below to go much deeper on all of the above. Let’s take a look under the hood, shall we? 👇

CHINA CHARTS NEW ROADS

One of the first things I asked Levi was who’s ‘winning’ at battery swapping? Swapping doesn’t garner all that much attention right now in the US. A high-profile battery swapping company flamed out last decade, which didn’t help.

The fact that swapping isn’t already en vogue raises one key question for me. Are there places where people appreciate and harness the potential benefits of swapping? The answer is yes.

China is eating our lunch at battery swapping. In fact, they’re crushing it in terms of charging infrastructure holistically. Here’s how Levi laid it out for us:

China is way ahead of us in terms of charging infrastructure. They’ve started to innovate in novel ways. China has more than 80% of the total installed DC charging capacity globally. The US has about 5%.

Given their head start on all things EV charging, China also has a better sense of where gaps in their infrastructure are starting to appear. And they’re started building out battery swapping infrastructure in addition to ‘traditional’ EV charging over the past 2-3 years to fill those gaps. In the past year alone, they’ve scaled from hundreds of swapping stations to 1,500+.

Why is China turning to battery swapping, at minimum, as a supplement to fast DC charging?

For one, there’s speed. Swapping is faster than charging and likely will be for a long time. Even the fastest EV chargers out there take about ~15 minutes to provide a substantial charge.

Utilization is another likely factor. The Chinese have likely observed trends similar to California, namely that their public charging stations don’t optimize utilization well.

Levi quoted California’s highway EV chargers’ utilization rates at about 3%.Will this increase as EV adoption increases? Sure. But you’ll still have times of day when, like gas stations, they’re not serving customers. Times that are also notably misaligned with when demands on the grid itself are lowest.

Battery swapping stations can offer increased utilization at scale simply because they operate with a larger pool of available batteries for charging at any time. Further, these batteries can charge overnight when demands on the grid are lower. This larger pool of batteries could also provide energy storage or flow electricity back to the grid when not in use. While EVs can conceivably do this, too, though car manufacturers aren’t designing current models to do so. Some vehicles can act as a backup generator for your house at best.

AMPLE’S DIFFERENTIATION 

In discussing the battery swapping technology that China is building, Levi noted marked differences between their tech and Ample’s:

Chinese battery swapping stations are huge and capital intensive. They make 1,000-pound battery packs, so you need a big industrial facility with massive robotics to change them. Ample does things differently. We break the battery down into smaller chunks, which does a few things:

– It allows us to build swapping stations that are the size of a carport.

– It allows us to take the same battery and put it into many different models of vehicles. You can mix and match our batteries like Legos.

To execute this, Ample uses an adapter plate that sits where the OEM’s battery pack would typically sit. It starts empty and has a tray to hold its modular batteries. The tray and the adapter plate always stay with the car; Ample’s robot swaps the batteries out of the tray. A Mini Cooper might only have 6 of the small modular batteries, whereas a utility van might have 12.

Further, the modularity of Ample’s system allows it to serve a broader range of car types. They could conceivably collaborate with almost any car manufacturer to integrate their system into their vehicles. Once Ample integrates its tech into a car, it doesn’t necessarily need to operate at maximum capacity in terms of how many Ample batteries it has onboard. If an end-user knows their upcoming trips will be shorter, they can use fewer battery packs, making charging faster and the vehicle itself lighter, which drives down costs.

An Ample battery swapping port. The author (me) presented in frame for scale 😂

Using more battery packs does mean Ample’s battery swapping technology probably won’t move quite as fast as some of their Chinese counterparts’ technology. If you’re only swapping one large battery, as the Chinese often do, you might be able to get that swap time down below 1 minute. When I pushed Levi on this point a bit more deeply, he helpfully distinguished who he considers Ample’s competition:

[Our system] will probably never be as fast as Chinese systems. Some of the Chinese systems can swap in 40 seconds. We don’t view them as competition, however. Nor do we consider charging as our competition. If we move from a niche EV market to revolutionizing the entire US automotive sector, we need something as fast, economical, and convenient as gasoline.

From that perspective, you don’t need to compete with < 1-minute charging. If the average gas station visit takes 3-5 minutes, then getting swapping times down that low, as Ample aims to do, is good enough.

SWAPPING AT SCALE

Ample’s end goal is for consumers to have a choice between a battery swapping EV and a DC charging EV at the point of sale. That future will take some time. To get there, Ample’s initial focus is on fleets, i.e., businesses operating larger pools of vehicles. Levi explained as follows:

Our initial focus is on fleets. For one, fleets are high mileage; they drive much more than your average consumer-owned vehicle, which sits around 95% of the time. Fleets also provide us with more predictable demand. We know where we need to deploy swapping stations. And then, in several years, we can take the swapping stations we’ve built to meet fleet demands and open them up to consumers. That’s how we get a foothold in markets.

Fleets are also ideal customers for battery swapping. Whether you imagine ride-sharing businesses or delivery businesses, the onus on uptime is the same. In contrast, companies like Starbucks are piloting EV charging stations because they know their customers are likely to linger longer, making them a more attractive site for charging that takes more than 10 minutes.

At present, Ample predominantly leases its vehicles to fleet companies that service customers like Uber. The fleets served by these companies operate in more limited geographies, meaning they’re less concerned with range and can be well served by a more concentrated footprint of swapping stations.

The previous quote from Levi also elucidates Ample’s go-to-market. If you can sell to fleet operators, that helps finance the construction of the necessary battery-swapping station infrastructure. Once those are open, you can broaden the customers you might consider serving. You’re running a lot more risk if you built the infrastructure first and tried to go straight to consumer. But if you open stations to serve fleet operators in every major metropolitan area first, you can eventually show individual consumers a pretty convincing map of coverage.

THE IMPACT

Everything we’ve explored today doesn’t just offer a potentially attractive economic solution for making EVs as easy to own as gas-powered vehicles. When I asked Levi to explore battery swappings’ climate impact, his policy expertise, owing to time spent from the Obama admin to the World Economic Forum, came to the fore:

We’re not selling swapping stations. We don’t even sell the kit to make the car’s battery swappable. We sell electric miles. From a climate perspective, we have to transition as many gasoline miles to electric miles as possible. Building an electric car isn’t climate-positive in and of itself. Displacing a bunch of gasoline miles is. The more miles we sell, the more we do to address climate change, and it aligns with Ample’s economic incentives as well.

Further, returning to the discussions of grid dynamics we waded into previously, DC charging isn’t necessarily the best solution for the climate when viewed in terms of existing energy infrastructure. Charging a Tesla puts significant and immediate strain on the grid. Simply put, fast DC charging is very [capital and resource] intensive. Levi likened it to filling a bathtub with a firehose:

When you turn on high-powered chargers, you’re drawing on demand immediately. Some cars require a 350 kWh charger, which is the equivalent of charging a big commercial building [albeit for a short amount of time].

DC charging can be so energy-intensive that a 2019 BCG study estimated that utilities would need to invest an additional $1,700 to $5,800 per EV in infrastructure upgrades.

And of course, the electricity to charge vehicles rarely comes from 100% renewable and clean energy sources. If every American owned an EV and plugged it in when they came home from work, most of the natural gas peaker plants in that nation would be firing on all cylinders to support that additional grid demand during those peak electricity consumption hours.

Sure, that example is a logical extreme. But it clarifies the importance of battery swapping operators’ counter-cyclical ability to charge batteries during off-peak hours.

Finally, when EV manufacturers work to address consumer preferences around vehicle range, they’re achieving diminishing returns concerning the materials and battery storage capacity they’re installing in cars. When a new EV goes from a 300 to 400-mile range, it becomes increasingly less likely that that capacity will be used compared to past increases from 100 to 200 miles. Here’s Levi again, putting it more succinctly than I:

Every time Tesla puts an additional kWh into its electric vehicle, that additional kWh has marginally decreasing benefits. It’s a waste. It’s a waste of batteries and precious metals that go into them. Better to utilize the same amount of storage capacity intensively.

THE ROAD AHEAD

What’s next for Ample? More scale! Here’s what Levi was able to share on near-term plans:

The next deployments will be in Europe, and then we’ll have subsequent deployments in Asia, including with ENEOS, a large Japanese oil & gas company.

As with all climate technologies, scale is critical for the business and to drive impact. Especially so for battery swapping. To achieve the benefits like increased utilization that we’ve explored in this piece, you need many battery swapping vehicles on the road, all using a large pool of shared batteries. If that scenario doesn’t materialize, you end up with low-utilization batteries sitting around, and you’re back to square one.

Success for swapping at a consumer level could run through a scenario in which several major car manufacturers get on board with the idea. This isn’t a given – previous attempts to scale battery swapping in the US sank when manufacturers wouldn’t bite. Another threat is if EV charging times continue to decrease, diminishing the speed benefits of swapping. This consumer scenario isn’t the only path to viability, however; as Levi noted, a “lower volume” scenario that continues to be fleet-focused can work even with one manufacturer onboard.

Last year, Ample raised a $190M Series C and C+, meaning they should have a considerable runway, even as interest rates rise and the fundraising fever in venture capital from the past couple of years becomes a bit more measured.

Whether battery swapping can make good on its promises to help balance the grid and improve fleet operators’ business models depends as much on companies like Ample’s success as it does on everyone from policymakers to consumers’ willingness to give the technology an unbiased look. Competing with the enshrined public consciousness of what EV ownership means, i.e., your own battery, charging on your own terms, might be the hardest part.

All that said, as we noted at the outset, swapping is already a success in China. If it can work there, it’s certainly worth another look for entities ranging from fleet operators to any city, state, or country taking electrification seriously.