It works. They love it.

I have never been a big fan of battery swap for EVs. When Better Place started out I thought they might have a chance to succeed if they got more than one OEM to buy into it (they didn't - only Renault agreed to make a car that could use the service) and if they first concentrated all of their assets in Israel, a relatively small country where they could thoroughly cover the whole country rather easily (they didn't do that either and spread themselves too thin).

So when I heard that Chinese EV startup NIO was going to be offering battery swap services to their customers, I was left scratching my head a bit. It seemed like an enormous investment that attempts to solve problems (long charging times and limited range) that are rapidly going away. 

Back when Better Place started in 2007, there weren't any EVs available to buy, but the ones that were under development, except for the Tesla Roadster, were going to have a sub-100-mile range, and take many hours to recharge. Additionally, there was very little data to support long life for EV battery packs, so buying an EV without really knowing how long the battery would last was a huge gamble.

Battery swap locations sounded like a viable answer to these issues. In a couple minutes, you have a fully charged pack, and you could even lease the battery separate from the car so you never have to worry about it needing to be replaced since you just swap it out for a new one every few days.

NIO Battery Swap
My ES6 sitting in an NIO battery swap station in Beijing

However, in 2020, we now know EV battery packs last a long time when properly cared for. We also have EVs that can go 200 to 300 miles per charge and EV charging keeps getting faster and faster. Some EVs can DC Fast charge at a rate of more than 200 kW, making a 20-minute stop good enough to add 150+ miles of range. And we're just beginning. Driving ranges are going to continue to get longer and charging is going to continue to get faster. 

So why would anyone invest so much money and effort in a technology that will most likely not be needed or possibly obsolete in a few years?

A few weeks ago I traveled to China as a guest of NIO's so I could report on their progress and get a better idea of what NIO was up to these days. One of the things on my list for the trip was to experience their battery swap process and, if possible, chat with NIO customers that use the service. 

After driving around Beijing for about 50 miles in an NIO ES6 SUV, I headed for a battery swap station in Beijing. I still had more than 100 miles of range remaining, but I wanted to experience the battery swap process so we asked Nomi, NIO's in-car virtual assistant to navigate us to the nearest facility.

NIO Battery Swap

Upon arrival, I parked the car outside the station and an NIO employee backed the vehicle into the bay. There was also a garage door on the back of the station so in some locations the driver pulls in and then backs out when the swap is finished. I noticed that the swap station looked like a temporary structure, not something permanently built onsite so I asked about it. 

I found out that was exactly the case. These stations are designed to be moved from location to location if necessary. They can be assembled on-site very quickly and a new location can be up and running in a couple days if the state-owned power utility does their hook up quickly.

If NIO sees that a particular location isn't being utilized enough, they can pack it up and drop it down in another parking lot where they expect utilization to be better. If a location is being over-utilized they can simply drop another swap station off next to the one they have and double their capacity, provided they have enough space available. 

NIO Battery Swap
Inside a NIO battery swap station

While my battery was being swapped, which took a little under six minutes, another NIO owner stopped by to swap their battery. I introduced myself and asked if they minded me asking them some questions and they obliged. They told me they wouldn't have bought the car if NIO didn't have this battery swap service. They don't have the ability to charge at home, so they rely entirely on public charging and there aren't enough high-speed public chargers yet. Therefore, owning an EV wouldn't be convenient if they couldn't quickly swap the battery. Plus, it's a free service for NIO customers so they knew they wouldn't have to pay anything for fuel as long as they owned the car and that was a big incentive. 

The next day we traveled to Shenzhen to attend NIO day, an annual event that celebrates the brand. At this year's NIO day CEO William Li introduced NIO's next offering, the EC6, as well as the redesigned ES8 SUV and announced that NIO would soon be offering a 100 kWh battery pack on all of their vehicles, in addition to the 70 kWh and 84 kWh packs currently available. There were around 8,000 people in attendance, most of which were NIO customers. 

Notable about the packs is that they are all the same physical size, and need to be so they are interchangeable for the battery swap system. Also as mentioned, NIO customers that have the 70 kWh pack can swap it for another 70 kWh pack for free but if they want an 84 kWh pack, for a long trip, for instance, they can rent it for $10 per day. I'm sure the 100 kWh pack will be available also, but the rental fee has not yet been announced. 

The next day I visited a NIO store and had the chance to sit down with about a dozen NIO owners and chat with them about the brand. Think of a large Tesla store, the cars on display on the ground level, with a large second floor that has a coffee bar, a lounge and a play area for children. Access to the 2nd floor is restricted to only NIO owners; it's like a private club. 

NIO Battery Swap
The interior of the NIO ES6 SUV

So I sat down with about a dozen NIO owners and asked them about the owner's experience, why they chose NIO, what they thought about Tesla, etc. Every person I spoke to brought up the battery swap and how much better it made the ownership experience. Many of them said they wouldn't have gotten an EV if the battery swap wasn't part of it. They either were too concerned about the time it would take to charge, or worried that after a few years the range would have degraded too much.

With battery swap, you never have to worry about battery degradation, because you just get a new battery. NIO checks the state of health of the batteries when they recharge them at the swap stations and if they diagnose an issue, they take the pack out of service and repair it. 

In China, no one owns land, and very few people live in private homes except those that live way out in the rural areas. In cities, where most of the cars are, everyone lives in large apartment buildings. Very few of these have onsite EV charging, so owning an EV means you need to rely on public charging infrastructure. So it's easy to understand why charging is a major concern for potential EV owners. 

In addition to the approximately 125 battery swap stations, NIO is also building out a network of high-speed "superchargers". I learned that all DC-fast chargers are referred to as superchargers in China, unlike in the rest of the world where only Tesla's high-speed chargers are called that.

Has this experience changed my mind on battery swap? Well, yes and no. I still don't think it's necessary or a good investment for the US or Europe. The driving range on EVs is getting longer and longer, and charging times are getting shorter and shorter. That alone is enough to make battery swap something that might only be useful for another 4-5 years. 

NIO Battery Swap
NIO ES6 SUV

However, for NIO battery swap working. NIO is using this service as an effective tool to sell their cars, kind of like how Tesla offered unlimited free supercharging in their first few years of Model S sales. With NIO, you never have to pay to charge your car, "refueling" only takes 6 minutes and there's no concern that your battery will degrade over the years. Personally, I could see NIO phasing out battery swap in 6 or 7 years when their supercharger network is more robust and their cars all go 300+ miles per charge. Additionally, there's a push to improve EV charging at residential apartment buildings, so that will help to relieve some of the stress on the need for battery swap. 

China is currently a highly competitive market for electric vehicles, and NIO is selling more than a car, they are selling an ownership experience that they believe is better than their competition which, of course, includes Tesla. Currently, I see the battery swap is an integral part of NIO's ecosystem. After visiting NIO, speaking with their customers and using one of their battery swap stations, I came away with a newfound respect for this service. It just works.