To The Moon

There has been extensive discussions about the pros and cons of battery swap versus fast charging over the years. Some say battery swap will be less appealing when fast charging is fast enough. Others say that the battery swap business model doesn't work. In my opinion, if you zoom out and look at the big picture, battery swap station network is of strategic importance for any country especially in the new energy era and is here to stay. And the reason is battery swap stations act as Virtual Power Plants.

What is Virtual Power Plant?

Simply put, a Virtual Power Plant (VPP) is a network of decentralised, distributed energy resources. As more and more electricity is produced via solar, wind and other renewable means, there is also an increasing need to store over-produced energy for later consumption. 

And this is where Battery Swap Stations come in. They act as a VPP for the most energy-consuming device a consumer would own - an EV car.

This is why battery swap stations were specifically highlighted in China's national energy strategy. 

Challenges

While NIO has taken the lead in building out the network as early as 2014, there have been a number of players also entering the scene such as CATL.

Another challenge is the standardisation of battery packs. Investors have often criticised NIO for not standardising the battery packs size so that they can be used between all the models. in my opinion, from the technological perspective, it's more risky to do it now as battery technologies are still progressing rapidly. Imagine standardising now on a bigger size pack only for newer packs to come in a smaller form factor. Another reason is that different W of batteries have different sizes. Hence, at least in the foreseable future, it's more important for swap stations to be able to accommodate different pack sizes. 

Ok, that's all the sharing for now. Let me know your thoughts in the comments. Thank you.