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Better Place EV battery swapping might find a sort of good place in China

December 22, 2011

In mid-December, battery-swapping promoter Better Place announced it had, with the China Southern Power Grid,  http://eng.csg.cn/ opened China’s first Switchable Electric Car Experience Center in the south China city of Guangzhou. The Center aims to introduce people to the concept of battery swapping, an alternative to battery recharging as a way to refuel a pure electric vehicle. http://tinyurl.com/7qxlnm5

Better Place and China Southern Grid recently opened a battery swapping experience center in southern China.

I recently spoke with Dan Cohen, vice president of strategic initiatives at Better Place, www.betterplace.com about his company’s plans in China. As you might expect, he was optimistic about the possibilities for Better Place in China. To be sure, I have been hearing from various industry sources that battery swapping is gaining favor with the Chinese government. But I came away from my talk with Cohen thinking Better Place faces some pretty big obstacles in China. At best I think it will be a small player in China’s electric vehicle charging market.

Dan Cohen, who is probably one of the laowais in this pic, figures battery swapping is the right option for China.

As there are only a handful of pure electric vehicles on the road in China right now anyway, the country is still trying out different charging models.  “We will still see for a while trials in different areas” of China, said Cohen. “What is very clear is that the swappable battery has gained a lot of traction and makes a lot of sense for them.”

First, a quick lesson on the concept of battery swapping. One of the big barriers to consumer acceptance of pure electric vehicles is range anxiety, the fear that one will run out of “gas” in some strange place and not be able to “refill” the battery easily or quickly. Better Place proposes battery swapping as a solution.

Using a Better Place battery swapping station is somewhat like going through a drive-through car wash. Your car (with or without you in it) is moved by a conveyor belt onto a spot where the battery is automatically removed and a new one installed in a matter of minutes. The depleted battery is placed on a storage rack for recharging. When that battery is full, it is placed in another electric vehicle.

Sounds simple, but first there is the consumer trust hurdle. Consumers have to believe the battery they are receiving is of the same quality as the one they gave up, and it truly fully-recharged. John Proctor, the Better Place PR guy, assured me that Better Place is focused on “taking the risk and worry out of it for consumers.” But this is China, the place where a company used substandard ingredients in baby formula to make a few bucks. I’m just saying.

Then there is the issue of having electric car models that are able to use the battery swapping model. Cohen said Better Place is “in discussion” with more than one automaker in China. “Hopefully we will have some real cooperation,” he said. Well, only one Chinese automaker, BYD, is thus far making pure EVs in China.  www.byd.com A BYD source told me BYD didn’t like the battery swapping model because it didn’t want to risk having its battery technology intellectual property being stolen.

Of course, there are many other automakers in China. But I heard from a supplier source that few are actively pursuing pure electric vehicles right now because the government isn’t promoting them. Because battery technology isn’t mature, it has backed off from pure electric in the near term to focus on plug-in hybrid electric and hybrids. http://tinyurl.com/7a5z5vs

Next is the issue of who will supply the batteries for the swapping stations. Better Place uses A123 www.a124systems.com batteries in some other parts of the world. In China, Cohen said, “it will depend on who we work with. Probably a local battery manufacturer” will supply them. Chinese battery manufacturers are “advancing very quickly on quality,” he added. Well, sort of. Even the Chinese government admits the industry has a ways to go before it can meet global standards. At least Better Place will likely have the option of using batteries manufactured in China at the SAIC-A123 joint venture. http://ir.a123systems.com/releasedetail.cfm?ReleaseID=430981

On its website Better Place touts its commitment to promoting a global standard for an EV recharging plug. Meanwhile, China has yet to announce a national plug standard, much less sign on to a global standard. How does Better Place feel about that, I asked Cohen? He said: “You definitely you see more and more committees in China discussing standards. We are obviously engaged in trying to help China. This is a long process. We are in there. We hope to see it mature here as well.”

China hasn’t joined in any international standard groups or put forth a national standard of its own yet because various ministries in Beijing are fighting over who has the right to determine what the standard will be. Those same ministries fight over many other aspects of the electric vehicle industry. Cohen admitted that the plethora of government ministries—from the Ministry of Information Industry and Technology to the National Reform and Development Council– weighing in on EV policy was confusing. “In the beginning, it was hard for us to navigate,” he said. “It was hard for us to know what was policy and what was opinion.” The issuance of the 12th Five Year Plan, with its emphasis on promoting electric vehicles, made the direction much clearer, said Cohen.  http://tinyurl.com/7vlamcy

In recent months, of course, the government has changed its emphasis in the sector from pure electric to plug-in hybrid electric and hybrid. So the direction, at least in the near term, isn’t all that clear.

Finally, the last hurdle I am going to talk about right now—the fact that Better Place’s partner, the Southern Grid, is not a national utility. In late 2002, China’s monolithic electric company divided in two. The Southern Grid, as its name suggests, assumed responsibility for providing electricity to five provinces in south China, Guangdong, Guangxi, Yunnan, Guizhou, and Hainan. The other utility, the State Grid www.sgcc.com.cn provides electricity for the rest—26 provinces, autonomous regions, and municipalities.

Better Place began talking with Southern Grid about seven months ago, said Cohen. Turned out Southern Grid was also looking for a partner. After some shuttling between Israel and Guangzhou, the two chairmen met and the deal was done. Better Place also talked with State Grid, but nothing came of those talks, said Cohen. What that means for now, of course, is that Better Place can only spread its battery swapping mantra in the five provinces where Southern Grid operates.

Of course, these are very early days in China’s recharging infrastructure market. And Better Place knows  battery swapping will likely not be the only recharging solution in China. “It still is not a done deal in terms of a full China directive,” said Cohen. Better Place also has other services and products that could find a market in China, for example its EV network software that helps a utility balance the demand on the grid for electricity. “We provide a completely managed service. Better Place knows how to distribute that energy,” says Cohen.

And the new Experience Center in Guangzhou is mainly aimed at governments and businesses right now, said Cohen. So if Better Place can manage its expectations where its China business is concerned, and by that I mean keep them really low, the Guangzhou investment could turn out to be a good one. But don’t expect to see China covered with Better Place swapping stations anytime soon.

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6 Comments leave one →
  1. December 23, 2011 12:03 am

    I experienced BP’s battery swap station when I was in Tokyo in June of 2010. They had three Nissan SUVs converted to electric and were running them as a taxi fleet in Tokyo. We rode up on the platform, and less than 60 seconds later, we drove off with a fresh pack. That was cool.

    Now, here’s why it won’t work in general use, with a couple of possible exceptions.

    For this to be anywhere close to feasible, most, if not all, OEMs will need to use the same battery chemistry and the same sized pack. They’ll also all have to design their vehicles to accept battery swaps. So far, none of the OEMs delivering, or designing, EVs are willing to do any of those things.

    Then there are the economics. Let’s say you do get enough OEMs to build swappable battery packs and use the same chemistry, etc. You spend minimum $1 million to build the station, staff it with 2-3 people and pay all the costs of operation. You also have to stock many copies of the fully-charged battery packs to have on hand for the customers. Now, you get a customer who drives in, you swap the battery pack, and the customer drives off. What have you sold them? You sold them about 25 kWh. You have to buy those kWh from the utility, mark up the price maybe 100%, and you still only make about $3 on the transaction. In what economy will that make sense?

    In the meantime, you’re competing with PHEVs and fast charging. Personally, I see the roll out of plug-ins as being mostly BEVs with a sizable percentage of PHEVs for those who do a lot of long distance. The economics of swappable battery packs are too tough for general use. That said, for some large taxi fleets of fleets with 24/7 operations, a smaller scale battery swap scenario might work since you would use all the same vehicle and therefore only one battery. The NY Taxi fleet, for instance, would be a good use for this.

  2. Lawrence permalink
    December 24, 2011 4:18 pm

    Standardization is definitely the huge hurdle faced here. I think of my toothbrush and how easy it would be to standardize that charger. Why not for parked EVs as well? Hope you will update us Alysha on anything you hear about this alternative.
    Merry Christmas, and may you and your research thrive in the New Year of the Dragon!

  3. Marc Chang permalink
    December 30, 2011 12:49 pm

    Alysha,
    Have a look to the solution offered by the State Grid Corporation of China, which is about 8 times bigger than the CSPG, Better Place’s demo partner.
    The car in the video is a Kandii KD5011XXYEV:
    http://www.indaa.com.cn/video/gsyw/201112/t20111223_876007.htm

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  1. Better Place Opened China’s First Switchable Electric Car Center | EV Battery Forum – Electric Vehicle Conference

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