Climate

What it will take for EV battery swapping to go mainstream in the US

Charging batteries is what keeps most electric vehicles on the road. But swapping out dead batteries for new ones could be a model that takes off in specific corners of the U.S. EV market.

A person's arm reaches to pull a battery out of a battery-swapping station.

While a handful of startups are trying to get it to take off stateside, the headwinds against battery swapping may keep it relegated to a handful of uses and industries.

Photo: Samyukta Lakshmi/Bloomberg via Getty Images

Electric vehicle infrastructure has traditionally focused on plug-in chargers. But swapping out batteries near death for fresh ones is an alternative approach to keeping EVs on the go.

The practice has found a toehold in China, but so far failed to break through in the U.S. While a handful of startups are trying to get it to take off stateside, the headwinds against the technology may keep it relegated to a handful of uses and industries.

Chinese EV company Nio has carved out a battery-swapping niche in the country’s luxury market. That’s in part because, when done right, battery swapping can essentially replicate the gas station experience: a quick stopover before heading back to the road. The practice promises to eliminate the “range anxiety” that surveys show plagues would-be EV owners by softening the transition, especially for drivers for whom time is of the essence. Yet even in China, the technology has yet to be fully embraced for a handful of reasons that have also slowed battery swapping from spreading in the U.S.

“If saving 20 minutes is so important for you that you would be willing to pay hundreds of dollars more — or even thousands of dollars more — then battery swapping will do it for you,” said Gil Tal, a researcher at the University of California, Davis, Institute of Transportation Studies. He added that anyone who claims battery swapping could viably overtake fast charging is “trolling us.”

Battery swapping, while quick, is hardly as seamless as changing the AAA batteries in a television remote. EV batteries are heavy, requiring expensive robotic arms to switch them out. Furthermore, the practice by definition requires more than one battery per vehicle, which adds to a car’s cost. At a time when battery materials come at a premium and the U.S. battery supply chain is still being built, that puts the technology at a distinct disadvantage compared to charging.

However, Tal said that in certain “edge cases,” swapping might make sense.

“In the near-term, I think where these companies could find success is in particular, discreet business models where they make sense,” said Dave Mullaney, a principal on the carbon-free mobility team at the think tank RMI, citing urban micromobility, last-mile urban delivery and certain types of trucking.

Ample, the most prominent battery-swapping startup in the U.S., is taking a slightly different approach, though. The company is prioritizing commercial auto fleets.

Ample has created an adapter plate that slots into the space where an EV battery resides, which is then fitted with multiple battery modules that are smaller and lighter than a full battery. It’s cheaper and easier to change out these modules at a swapping station. These stations are relatively easy to set up because of the modular nature of the batteries they’re swapping out, said Ample CEO and co-founder Khaled Hassounah.

“We need a couple of parking spots and a flat piece of land, and in a couple of weeks, we can get a station up and running that works just like a gas station: five minutes to get a 100% charge,” Hassounah said.

So far, Ample has deployed its technology in roughly 100 vehicles in the Bay Area. Those vehicles are primarily Ubers, which Ample has a partnership with. The startup’s goal is to have at least 1,000 vehicles with its swapping technology onboard by the end of 2022. That’s not exactly a sign battery swapping is ready for prime time, but the company has raised more than $275 million over four funding rounds, indicating plenty of VC interest. Ample also plans to expand to Madrid, Spain, and Kyoto, Japan, and it will eventually cater to individual EV owners.

A recent report from Straits Research paints a fairly optimistic picture of the potential market for battery swapping, led by the edge cases Mullaney mentioned. The researchers found that the U.S. market was valued at $15 million in 2021, but could grow to as much as $138 million by 2030. That’s big growth, but still relatively small compared to the EV charging market; a separate Grand View Research evaluation found that that market had a value of $2.9 billion in the U.S. last year, and it could grow by nearly 37% annually between now and 2030.

Two- and three-wheeler passenger vehicles dominate swapping, accounting for 55% of the market. Micromobility is an appealing market for battery swapping, Tal said, because the batteries are smaller and easier to change without robot assistance. India, for instance, is close to finalizing a nationwide battery-swapping policy for two- and three-wheelers, which make up a huge chunk of the country’s transportation fleet.

“For American cars, it’s a lot tougher,” Tal added.

The report also found that if automakers and battery swapping companies like Ample collaborate on making new EVs swapping-compatible, that could nudge the market to grow further. But Tal is skeptical that there would be much buy-in from these automakers, many of which have already invested heavily in EV charging.

The past of battery-swapping also doesn’t really inspire much confidence in a bright future where it overtakes charging. Israeli startup Better Place emerged in 2007, and coordinated a number of pilot projects with Renault-Nissan in its tenure. Despite wrangling more than $600 million in investments, the company filed for bankruptcy in 2013.

Tesla has also dipped a toe into swapping out batteries in its vehicles, offering the service as part of a pilot project for the Model S in 2013. However, a former Tesla executive told Reuters that the swapping process was “a pain in the ass,” and the project sunsetted after two years. Tesla instead threw its weight behind building out its Supercharger network, which has become a major selling point.

The company found that charging is simply what most drivers prefer: “People don’t care about pack swap,” Tesla founder Elon Musk told the company’s shareholders in 2015.

“If I was a swapping company in the U.S., I would be forgetting about passenger cars right now,” said Mullaney. “I’d be looking at specific, micromarket segments that would allow me to get my foothold.”

Fintech

Upstart has a new plan to sell Wall Street on its loans

The AI-powered lender will hold some loans on its balance sheet as it seeks partners for long-term capital.

Despite the current struggles, Upstart views the marketplace model as the best way to write to keep its loan business growing.

Photo: Upstart

After a revenue drop its CEO called “unacceptable,” the leadership at fintech lender Upstart is making a bet on the strength of its ability to underwrite loans with AI.

The San Mateo company is planning to leave some loans on its balance sheet that investors do not want to buy, as concerns about the economy shift Wall Street away from backing riskier consumer debt. Rather than pull back on its lending in response, the company said it will hold some loans as it seeks longer-term capital partners.

Keep Reading Show less
Ryan Deffenbaugh
Ryan Deffenbaugh is a reporter at Protocol focused on fintech. Before joining Protocol, he reported on New York's technology industry for Crain's New York Business. He is based in New York and can be reached at rdeffenbaugh@protocol.com.
Sponsored Content

How cybercrime is going small time

Blockbuster hacks are no longer the norm – causing problems for companies trying to track down small-scale crime

Cybercrime is often thought of on a relatively large scale. Massive breaches lead to painful financial losses, bankrupting companies and causing untold embarrassment, splashed across the front pages of news websites worldwide. That’s unsurprising: cyber events typically cost businesses around $200,000, according to cybersecurity firm the Cyentia Institute. One in 10 of those victims suffer losses of more than $20 million, with some reaching $100 million or more.

That’s big money – but there’s plenty of loot out there for cybercriminals willing to aim lower. In 2021, the Internet Crime Complaint Center (IC3) received 847,376 complaints – reports by cybercrime victims – totaling losses of $6.9 billion. Averaged out, each victim lost $8,143.

Keep Reading Show less
Chris Stokel-Walker

Chris Stokel-Walker is a freelance technology and culture journalist and author of "YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars." His work has been published in The New York Times, The Guardian and Wired.

Enterprise

Does your boss sound a little funny? It might be an audio deepfake

Voice deepfake attacks against enterprises, often aimed at tricking corporate employees into transferring money to the attackers, are on the rise. And at least in some cases, they’re succeeding.

Audio deepfakes are a new spin on the impersonation tactics that have long been used in social engineering and phishing attacks, but most people aren’t trained to disbelieve their ears.

Illustration: Christopher T. Fong/Protocol

As a cyberattack investigator, Nick Giacopuzzi’s work now includes responding to growing attacks against businesses that involve deepfaked voices — and has ultimately left him convinced that in today's world, "we need to question everything."

In particular, Giacopuzzi has investigated multiple incidents where an attacker deployed fabricated audio, created with the help of AI, that purported to be an executive or a manager at a company. You can guess how it went: The fake boss asked an employee to urgently transfer funds. And in some cases, it’s worked, he said.

Keep Reading Show less
Kyle Alspach

Kyle Alspach ( @KyleAlspach) is a senior reporter at Protocol, focused on cybersecurity. He has covered the tech industry since 2010 for outlets including VentureBeat, CRN and the Boston Globe. He lives in Portland, Oregon, and can be reached at kalspach@protocol.com.

Fintech

Binance’s co-founder could remake its crypto deal-making

Yi He is overseeing a $7.5 billion portfolio, with more investments to come, making her one of the most powerful investors in the industry.

Binance co-founder Yi He will oversee $7.5 billion in assets.

Photo: Binance

Binance co-founder Yi He isn’t as well known as the crypto giant’s colorful and controversial CEO, Changpeng “CZ” Zhao.

That could soon change. The 35-year-old executive is taking on a new, higher-profile role at the world’s largest crypto exchange as head of Binance Labs, the company’s venture capital arm. With $7.5 billion in assets to oversee, that instantly makes her one of the most powerful VC investors in crypto.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Policy

Trump ordered social media visa screening. Biden's defending it.

The Knight First Amendment Institute just lost a battle to force the Biden administration to provide a report on the collection of social media handles from millions of visa applicants every year.

Visa applicants have to give up any of their social media handles from the past five years.

Photo: belterz/Getty Images

Would you feel comfortable if a U.S. immigration official reviewed all that you post on Facebook, Reddit, Snapchat, Twitter or even YouTube? Would it change what you decide to post or whom you talk to online? Perhaps you’ve said something critical of the U.S. government. Perhaps you’ve jokingly threatened to whack someone.

If you’ve applied for a U.S. visa, there’s a chance your online missives have been subjected to this kind of scrutiny, all in the name of keeping America safe. But three years after the Trump administration ordered enhanced vetting of visa applications, the Biden White House has not only continued the program, but is defending it — despite refusing to say if it’s had any impact.

Keep Reading Show less
Anna Kramer

Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

Latest Stories
Bulletins