EV Battery Rental Programs

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EV Battery Rental Programs

Three additional EV battery leasing programs are those provided by NIO, Beijing Electric Vehicle Company (BJEV), and FOMM Corporations. Two trends that are driving the global adoption of EV battery rentals in vehicles are the increasing and improving technologies such as the battery-swap technology, and the increasing sales of electric vehicles (EVs) due to the rising awareness of people to environmental factors and the support of various government-backed initiatives.

#1: NIO

  • NIO is an electric-vehicle automaker that also focuses on providing swappable EV batteries for its customers. In providing this swapping services, customers can exercise the option of leasing the battery, "which is only possible with battery packs designed to be swapped out for recharging." Hence, it offers swappable, leased EV battery solutions.
  • The program uses a monthly/annual subscription model of financing.
  • "NIO customers who opt to lease the battery reduce the cost of their EV by $14,476. Then, they pay a subscription fee, either $142 per month or $1,570 annually, to access NIO’s battery swap stations and other services."
  • There are no indications as to the offerings for commercial vehicle leasing although "NIO has had discussions with other automakers about having other EVs use the NIO battery swap stations, but no deals had been finalized as of early January 2019."
  • More than 95% of its customers who bought 9,726 units of its ES8 SVU chose to lease the battery.

#2: Beijing Electric Vehicle Company (BJEV)

  • BJEV is the top electric-car producer in China. "It is leading the battery swap service as reduced government subsidies, long charging times and battery-induced fire accidents are discouraging potential buyers in the world's biggest new energy vehicle market." It plans to build 3,000 battery swap stations with a capacity to serve 500,000 electric vehicles by the end of 2022.
  • The financing program is subscription-based, usually as a monthly subscription.
  • BJEV provides a subscription-based leasing program for customers who choose to exercise the option during EV battery swaps. The introduction of "its budget EV300 small car, priced at the equivalent of about $11,700, with unlimited battery swaps permitted on a monthly battery subscription of about $64."
  • There are no indications of commercial vehicle leasing however, the company intends to expand its number of battery swap stations by 2022.
  • BJEV has said that it will separate the vehicles from batteries for leases to car owners and it is already offering this (EV battery swap technology) to three of its models. Furthermore, "authorities in Beijing have decided to add into its taxi fleet 6,000 electric vehicles capable of the technology, with additional 20,000 vehicles expected to be added in 2020."

#3: FOMM Corporations

  • In 2018, FOMM Corporations partnered with Fujitsu to create a new mobile infrastructure called the FOMM's Battery Cloud Service.
  • Among the capabilities of this novel technology is the ability to manage battery conditions, battery usage and replacement battery inventory quantities.
  • In the wake of the ability of individuals to buy EVs without batteries, the partnership is focused on exploring and expanding this market opportunity.
  • "The technology will enable vehicle users to charge their batteries at home as well as exchange them at service stations, and because the service will give users a constant awareness of their remaining charge, charging or replacing batteries can be made efficient. Also, service providers will be able to grasp changes in battery characteristics by managing battery status records."
  • FOMM was equipping and integrating an ultra-compact four-wheel EV, developed in-house, with replaceable batteries and planned on incorporating its Battery Cloud Service. As of the end of 2018, the mass production of this prototype should commence in Thailand, in tandem with the launch of Battery Cloud Service operations.


Trends Driving the Adoption of EV Battery Rentals in Vehicles

#1: Improving Technologies: EV Battery Swap Technology and Stations

Description:

  • "Due to the risk of depreciation of batteries as they become outdated rapidly, many customers and companies prefer leasing option than buying. For example, over 90% of Renault's European customers rent the battery of their Z.E. vehicles."
  • The trending EV battery swap technologies are stations where depleted batteries can be swapped and another (fully charged), leased to the EV car owner. "Reduced government subsidies, long charging times, and battery-induced fire accidents are discouraging potential buyers in the world's biggest new energy vehicle market."
  • Similar to and in line with the 2015 Fixing America’s Surface Transportation (FAST) Act, which specifically authorized the ability to lease batteries separate from a vehicle, EVs are now being made with replaceable batteries, which in turn, sets the pace for individuals to purchase EVs without batteries.

How it is impacting the market:

  • While this technology appears to be relatively non-existent in the US, the Chinese government and EV manufacturers have stepped up to expand the market for this technology by establishing "common industry-wide standards that would allow drivers to swap out EV batteries in a matter of about three minutes — by making the process uniform across any car, any battery, and any facility." This technology will likely boost the share held by the region in the global market.
  • In addition to its 187 battery-swap stations, BAIC BluePark (BJEV) owns, it is set to build additional 3,000 swap stations, "enough to supply a half-million electric vehicles by the end of 2022." This will cost a total of $1.4 billion.
  • With a lesser presence in the US, "making battery swapping available in BAIC EV models in the US, could represent a real opportunity for greater EV battery and EV adoption in the US."
  • NIO had 80 battery-swap stations in China in 2018 but it has increased the numbers to 187 in 2020.
  • Furthermore, novel models of this technology are coming as the startup Japanese EV maker, FOMM, in partnership with Fujitsu are developing a Battery Cloud Service, "which would give customers further ability to exchange a depleted battery for a fully charged pack at a service station in just five minutes."

Examples of companies driving the trend:


#2: Increasing Production and Sales: Environmental, Economic and Governmental Factors

Description:

  • The steady increase in the manufacture and sales of EVs around the world due to environment and emission concerns and the burst in the awareness of people towards the reduction of vehicular pollution are major factors driving the EV battery rental and swapping market.

How it is impacting the market:

  • The production and sale of EVs are further driven by various government support to encourage consumers to choose EVs through tax credits, incentives, and lucrative grants.
  • Furthermore, more and more consumers are becoming aware of the implications of pollution, especially exhaust pollutants, and are increasingly opting for EVs to curb this issue. And they'd do so by opting for affordable prices which are provided by the electric vehicle battery rental or lease market. These will boost the EV battery rental and swapping market.
  • In the EU region, these reasons above have significantly driven the market, as the region dominates the global market.
  • In addition to the increasing environmental awareness of the Europeans, "the promotion of electric vehicles and development of necessary infrastructure like charging station, trained human resource, well-established service provided by the companies" are other factors that drive the increasing adoption EV battery rentals.
  • "The idea of leasing battery is popular in Europe which can be known from the fact that Renault recently announced that it signed its 100,000th battery lease and now ZOE owners can upgrade their battery pack to its new 41 kWh packs." Furthermore, the company has continued to solve the power needs of EV owners with higher battery capacities for more guaranteed drive lengths.
  • More and more Proterra customers, such as Park City, Utah and Moline, Illinois, are already using or have agreed to use the battery lease program.
  • In the US, following the 2015 Fixing America’s Surface Transportation (FAST) Act, "more than a dozen Proterra customers, including Park City, UT and Moline, Ill., are already using or have agreed to use the battery lease program."
  • In addition to Park City's partnership with Proterra for a fleet of six Catalyst buses that were funded as part of the 2016 Low or No-Emission Bus Program, it plans to extend the partnership "by leasing more batteries for its next set of seven Catalyst vehicles in pursuit of its long-term goal of going 100 percent electric."

Examples of companies driving the trend:


Research Strategy

To provide additional three battery leasing programs, we leveraged industry sources and conducted press scans for brands or vendors of EV battery leasing programs. However, this approach yielded Proterra, GPEKS, and Renault, which have already been identified. We targeted popular EV manufacturers such as Nissan, Mercedes-Benz, and General Motors, with hopes that they would likely offer such programs; however, all leasing programs are for its EVs. Moreover, while there've been announcements of EV battery leasing programs in the past, there is no evidence that any such programs still exist. Furthermore, they currently offer only replacement, refurbishment, charging or rebate programs. Hence, we searched deeper with a global focus, this time, including market reports. Through this, we could identify other EV battery leasing programs and key players in the market. This includes FOMM, Renault, BJEV, and NIO. Hence, we included FOMM and BJEV, as Renault and NIO have already been identified. Note that for FOMM, the company recently began its work on the program and are yet to release many details about it. But we've included it because no other program was found or is available.

To identify the 2-3 trends that are driving the adoption of EV battery rentals in the US, we sought industry and market research reports but found limited resources to sufficiently establish any trends in this regard. Moreover, conducting press scans were also unsuccessful, as the majority of reports mostly provide insights into the adoption of EVs in the US. And it appears that the first battery leasing credit facility (Proterra) in the North American public transit industry was quite recent, between 2018/2019. Therefore, leveraging these kinds of reports from publishers such as Market Watch and Transparency Market Research, we expanded the geographical focus to garnering the global trends, while highlighting available insights on the US.
Sources
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