Are ev battery swapping worth it - the economy of CATL battery replacement solution

The first batch of 4 quick-swapping stations to start service are distributed in Siming District, Huli District and Haicang District of Xiamen.

It is expected that by the end of this year, the construction of 30 quick-swapping stations will be completed in Xiamen. At that time, there will be 1 express exchange station within every 3 kilometers of service radius on Xiamen Island.

This release of the CATL is different from the previous release of the ev battery swapping plan. For the first time, the monthly rental price of the ev battery swapping block and the description of the service price of the quick swapping station were announced:

The minimum monthly rental price of the chocolate ev battery swapping block is 399RMB/block, and the rental price will be dynamically adjusted according to the different usage conditions of users.

The service price of the quick-swapping station is the same as that of the quick charge, and will be dynamically adjusted according to factors such as the site and time period.

“The ultimate solution for models in the 80,000-120,000 RMB range is chocolate battery swap.”

On February 15, CATL expressed its great expectations for ev battery swapping, on the grounds that “the initial purchase cost of new energy vehicles (excluding batteries) can be lower than that of fuel vehicles, and the speed of ev battery swapping is equal to fuel vehicle refueling, so as to solve the problem of cost-effectiveness. “

At present, the quick-swapping mode of CATL is first applied to operating vehicles.

The first batch of operators in Xiamen who purchased CATL’s battery-changing models for operation admitted that CATL’s pricing strategy is very cost-effective for both operators and drivers. “At present, 100 cars have been put on in Xiamen, and it is planned to reach 3,000 this year.”

Much more economical than gasoline vehicles

Battery swap station business models have upended the way electric vehicles are consumed.

This time, the consumption and use of ev battery swapping in Xiamen by CATL is divided into three steps:

In the first step, the vehicle buyer, the online car-hailing operating company, purchases the vehicle by separating the vehicle and electricity, that is, the vehicle without battery.

In the second step, the operating company signs a battery lease agreement with Times Electric to obtain the right to use the battery.

In the third step, the operating company recruits drivers. When the driver changes electricity at the Times Electric Service ev battery swapping Station, he will pay the actual electricity exchange rate in units of kWh.

Is the purchase, use, and cost-effectiveness of this electric vehicle higher than that of a fuel vehicle? To calculate to know.

According to public information, the first model equipped with CATL’s chocolate battery is the Bestune NAT, a five-seat MPV with a market price of 140,000-150,000 RMB.

“Electric Vehicle Observer” screened a seven-seat MPV fuel vehicle with a similar wheelbase, the Baojun 730, as the benchmark model.

According to the evaluation of “Autohome”, the average fuel consumption of this model is about 8.2L/100 kilometers.

First look at the price of the car.

While the Pentium NAT’s MSRP is over $140,000, that’s the price with the battery included. If the vehicle-electricity separation mode is adopted, the price is much lower.

Industry insiders revealed that the price of the CATL Pentium NAT quick-swapping version can be reduced by 70,000-80,000 RMB, and it can be roughly estimated that the selling price is around 60,000-70,000 RMB.

Look at the price of energy consumption.

According to the data given by CATL, the Pentium NAT ev battery swapping version will be equipped with 2 chocolate batteries, and the power of a single battery is 26.5 kWh.Then the vehicle has a charge of 53 kWh, a driving range of 400 kilometers, and an energy consumption of about 13.25 kWh per 100 kilometers.

According to the information disclosed by the CATL that “the service price of the quick change station is equivalent to that of the quick charge”, combined with the current charging price, it can be inferred that the service fee for battery replacement is 1RMB/kWh.

Combined with the current gasoline prices, the comprehensive cost-effectiveness of the two models during the purchase and use of the two models is calculated based on the standard of 300 kilometers of driving mileage per day for operating vehicles.

The price-performance ratio of the two vehicles is listed in the table below:

It can be seen that on the basis of similar vehicle costs, the single-day energy consumption cost of the Bestune NAT CATL quick-change version is about 40RMB, and the battery rental cost is converted into a single-day usage fee of 66RMB; Baojun 730 needs more than 200RMB, The comprehensive cost-effective advantage is very obvious.

The head of the Pentium NAT operator told Electric Vehicle Observer that they think this model is still very cost-effective.

First of all, it is cost-effective for the driver. One is that they rent it to the driver at a price of 3900RMB/month, which includes the rental fee of 2 batteries. The driver only needs to pay the cost of replacing the battery, which is about more than 40 RMB per day.

Taking Xiamen as an example, the local fast charging adopts the peak and valley price, and the driver can choose the preferential time to change the battery, which can greatly save the cost.

Second, compared to charging models, ev battery swapping saves the time cost of drivers. After all, it does not count as queuing time, and charging vehicles need to spend an extra 1-2 hours of charging time every day.

The ev battery swapping experience is completely comparable to the standard refueling, which greatly reduces the burden on the driver.

Second, it is cost-effective for the vehicle operator.

This is reflected in two aspects:
First, the vehicle purchased by the vehicle operator does not have a battery, which can reduce the purchase price of the vehicle, save a large amount of insurance costs, and significantly reduce the investment cost.

Second, due to ev battery swapping, there is no need to consider the problem of battery capacity decay after 3 years, only the depreciation cost of the vehicle, the operating vehicle is expected to be used for 8 years, and the rental amount of the vehicle does not need to drop significantly.The operator’s long-term income is guaranteed.

The person in charge is very optimistic about the prospect of this model. “Currently, the company has purchased 100 Pentium NATs, and plans to put 3,000 on board this year.”

Behind the economy – model cost reduction, technology cost reduction, scale cost reduction

Electric vehicles have developed rapidly in recent years, and the growth rate is amazing. However, it has gradually entered the stage of gnawing hard bones.

Previously, the electric passenger vehicle market was crowded at both ends: the high-end, with intelligence, service, and electric drive as its selling points, attracted early adopters;
The low-end uses the A00 characteristic transportation as its selling point, and has also gained a high penetration rate.

However, when it comes to the middle segment of automobile consumption, the largest segment of the spindle-shaped consumption structure, consumers pay special attention to cost performance and do not have strong purchasing power. Therefore, electric vehicles still need to continue to reduce costs in order to continue to popularize.

Unfortunately, the cost reduction curve of power batteries has recently ushered in an inflection point.

Due to the huge increase in demand for power batteries and the limited expansion of the supply of raw materials, the prices of many raw materials have risen to several times or even a dozen times that of two or three years ago, resulting in the price of power batteries having to rise accordingly.

In 2022, the price of power batteries will generally increase by 10-30% compared with 2021.

But the market can’t wait for battery prices to drop again. what to do?

As the global leader of power batteries with a market share of nearly one-third, he is even more concerned about this issue.

Because there is not much room for it in the stock market. Only by doing incremental market, its space can be effectively expanded.

The essence of the ev battery swapping solution in the CATL era is to solve the problem of cost-effectiveness, that is, the problem of cost reduction.

How to reduce costs? Its measures are to reduce model costs, technology costs and scale costs.

Mode cost reduction

By adopting the ev battery swapping mode, vehicle purchase bypasses the biggest cost item – power battery, and the price of the vehicle can be lower than that of fuel vehicles.

In the use stage, the advantage of the difference in oil and electricity is still there, plus a certain battery rental price, as calculated in the previous account, the use cost is relatively lower.

The battery rental price here has financial costs. Why can it be more cost-effective than consumers buying batteries?

In essence, it is the CATL that “squeezed” more value out of the power battery. On the one hand, the cost of the battery is high, and it should be used as long as possible so that the value can be reflected.

Therefore, CATL developed and produced long-life batteries for use in ev battery swapping models.

On the other hand, in the CATL, the battery is charged within a stable and controllable range, and the battery is often balanced, which is more beneficial to the battery life than the consumer’s own fast charging.

The ev battery swapping mode is to achieve a longer life of the power battery and share this part of the value with consumers, so as to achieve scale cost reduction. Instead of separation of vehicle and electricity, separation of vehicle and electricity itself does not create value.

Take technological innovation to reduce costs

At present, the bottom line of the cost of power batteries is the cost of raw materials. Prices of several core materials remain high. However, other materials can also be used to make batteries, but the energy density is slightly lower.

However, what consumers need is cruising range, that is, electricity, and what materials are used, they don’t care.

CATL can continue to innovate the material system to achieve technological cost reduction.

At present, the CATL chocolate ev battery swapping block uses nickel-cobalt-manganese ternary lithium batteries.

CATL can also launch lithium iron phosphate ev battery swapping modules, new product M3P (CATL calls it the ternary of phosphate system) ev battery swapping modules, ternary and lithium iron phosphate mixed ev battery swapping modules, and even A ev battery swapping module that mixes sodium ion and lithium ion.

After the material system is switched, the energy density of the single unit is reduced. However, the CATL adopts technologies such as CTP to improve the group efficiency, and the battery pack can also achieve a system energy density of 160wh/kg or close to it.

Guaranteeing the energy density of the battery pack can guarantee the power and the battery life.

These different material systems can help CATL to further reduce battery costs, and even benefit end consumers in the form of lower rents.

At this stage, the violent fluctuation of raw material prices is difficult to transmit to end consumers, which is conducive to further enhancing the competitiveness of new energy vehicles.

Scale cost reduction

CATL has cooperated with many mainstream car companies. It can break through the barriers between car companies and models, use one battery to serve different car companies, and further reduce battery costs through scale.

Taking the certificate data as an example, a total of 942,000 pure electric passenger vehicles were produced in China in 2020, of which 344,000 pure electric passenger vehicles were equipped with CATL, accounting for 36.6%.

Taking 340,000 vehicles in 2020 as the benchmark, half of the models are equipped with the ev battery swapping modules of CATL, so the number of battery-changing models will reach 170,000.

However, at that time, there were only 940,000 pure electric passenger vehicles in China, and the market share of CATL in China was less than 50%. The terminal sales data in 2021 shows that China’s pure electric passenger models will reach 2.38 million, and the market share of CATL has exceeded half.

Still based on the 40% share of CATL, the number of pure electric passenger models equipped with CATL will reach 950,000, and 1/3 will be replaced by ev battery swapping modules, which will also have a scale of more than 300,000.

With the continuous growth of the new energy vehicle market, ev battery swapping will promote the unification of battery specifications, which will bring about a huge cost reduction effect.

These triple cost reduction measures are still in progress, and the effect is expected to continue to improve. Only in this way can we truly solve the problem of electric swapping of fuel vehicles in the range of 80,000-120,000 RMB.

Possibility of 2C battery swap

The economic accounts of online car-hailing operators can be calculated, and CATL can continue to reduce costs, but for ordinary consumers, will they accept it?

From the terminal sales data in 2021, it can be seen that the acceptance of electric vehicles by private consumers has increased significantly, and the proportion of operating vehicles has been very small.
In particular, pure electric vehicles have achieved very good results in the A00-class and high-end model markets.

However, penetration of pure electric A-segment passenger vehicles remains low. The terminal sales data in March this year showed that the penetration rate of pure electric vehicles in A-class vehicles was only 18.7%.

The reason why this part of the demand is difficult to replace is because this stage corresponds to the car needs of mainstream families. In other words, A-class cars need to deal with the use of the whole scene, which is required in all aspects of long and short distances, but the living conditions of ordinary families also have certain restrictions.

The 80,000-120,000 price range fuel models mentioned by CATL when they were surveyed by investors is the price range of A-class cars.

Let’s first look at how big this part of the market is?

According to data, the sales of A-class vehicles in March this year were 327,000, accounting for 23% of the total sales. Throughout the year, nearly 1/4 of the market size has no reason to be abandoned.

The biggest advantage of CATL chocolate ev battery swapping for private consumers is that they can enjoy the driving experience of pure electric vehicles with the purchase cost of fuel vehicles, which is lower than the cost of fuel vehicles.

In terms of car purchase cost, since there is no battery, it can completely equalize the car purchase cost of fuel vehicles.

In terms of cost of use, fuel vehicles are maintenance cost + fuel cost.

The maintenance cost of pure electric vehicles is significantly lower than that of fuel vehicles, and the price of electricity is also significantly lower than the price of fuel. Although a certain battery rental cost is added, it can still be guaranteed to be much lower than the cost of using fuel vehicles.

Another advantage of CATL Chocolate ev battery swapping is that it is flexible and optional. For general family commuting, a 26.5-degree battery is fully enough, and you only need to pay the rent of one battery and the cost of ev battery swapping.

Even for occasional long-distance travel, consumers can choose to rent more batteries for use by the number of days, so as to achieve the most convenient use effect with the smallest burden.

In the later stage, as long as the ev battery swapping station is in place, the ev battery swapping mode of the CATL will almost eliminate the objective obstacles for mainstream families to buy pure electric A-class vehicles.

The rechargeable and swapping mode is more friendly to families with charging piles. They only need to pay the rental cost of the battery, enjoy the price of household electricity, and further reduce the cost of use.

The ev battery swapping solution of CATL has achieved a win-win situation among car companies, battery companies and consumers.

It is not only conducive to the expansion of the business of CATL, from battery production and manufacturing, to upgrading to electric vehicle services, and customers from car companies to consumers, with a broad future space;

It is also conducive to accelerating the swapping of fuel vehicles by new energy vehicles and helping the transportation industry to achieve the dual carbon goal. Even motorcycle battery swapping is trending now, here are the related companies Top 10 electric motorcycle battery swapping companies.