The resurgence of Battery-as-a-Service (BaaS)

What is Battery-as-a-Service?

In the Battery-as-a-Service (BaaS) model, electric vehicle (EV) owners purchase the EV without the battery, reducing the upfront cost of the EV.

The battery is then provided in the form of a subscription or lease agreement. Typically, this might take the form of a monthly subscription, whereby alongside the ability for ‘traditional charging’, the depleted battery can be swapped at specialist automated stations for a fully charged battery in a matter of minutes. The empty battery is placed into a charging port, where it is fully charged and can then be swapped into another vehicle.

BaaS is not a new concept. Better Place, a venture-capital backed Israeli start-up company – founded in 2007 and based in California – has previously
developed and sold battery swapping services for EV cars to address the concerns of consumers around a lack of charging infrastructure, known as range anxiety, and to defer the cost premium of EVs caused by the high cost of the batteries. The uptake for its battery swapping solution was limited and it found only one EV manufacturer partner (Renault) as other manufacturers were concerned about being tied into using a standardised battery pack. There was only one EV model, the Renault Fluence Z.E. that was able to use the battery swap system. Better Place built infrastructure in many locations, including in Israel, Denmark, Japan, and California, at a cost of $2mn for each battery swapping station before filing for bankruptcy in November 2013. Notwithstanding Better Place’s failure to launch, the concept proved to be ahead of its time and may well have been hampered by limited market demand for EVs in the early 2000s. The large investment needed to develop the charging and swapping infrastructure also meant that users had to drive long distances to swap their batteries, which limited customer satisfaction. Recognising the potential of the idea, Tesla trialled battery swapping with Model S owners in California in 2013 when the EV market was still nascent but seemingly ceased the service after two years. The lack of consumer interest relative to the increasing popularity of the company’s growing supercharging network was suggested as one of the driving factors for discontinuing the service.

Despite the previous challenges faced by the BaaS model, there is promise for the technology in the near future. Given the proportion of EVs in the market is now much greater than a decade ago, and backing from governments for EVs has increased, BaaS may have the potential to fill gaps not met by other EV charging models and may offer a useful alternative to on-street charging. As discussed later in this paper, Chinese EV manufacturer NIO has successfully rolled out BaaS infrastructure in China and is now looking to roll it out in Europe.

BaaS may have the potential to fill gaps not met by other EV charging models and may offer a useful alternative to on-street charging.”

A minimum of 300,000 public chargepoints will be required in the UK by 2030, a very large increase on the current 29,600 chargepoints in place.”

NIO owners can swap their depleted battery at battery swap stations in three to five minutes with the fully charged battery providing them with a 380-mile range.”

A key factor in customer engagement with BaaS is the shift in mindset towards subscription models.”

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.

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