Chinese automotive giant SAIC Motor announced on September 22 that it has jointly established a battery swapping firm alongside Sinopec, PetroChina, CATL and Shanghai International Automobile City, with a registered capital of 4 billion yuan ($564 million).
The company, named Shanghai Jieneng Zhidian New Energy Technology Co., Ltd., will regard power battery rental business as its core, carrying out R&D and promoting battery swapping technology, battery operation management, big data services, and more.
The new joint venture will rely on the network of more than 50,000 gas stations of Sinopec and PetroChina throughout the country to build comprehensive energy stations with charging and battery swapping services. SAIC’s Rising Auto, Roewe, MG, Maxus and other brands will launch models supporting battery swapping, covering SUVs, passenger cars, MPVs and commercial vehicles. Rising Auto’s R7 will become the first model to use the technology.
The newly-established firm will also promote the transformation of gas stations into integrated energy service stations. On the power network side, upgraded stations can balance the grid load and build virtual power plants to improve overall efficiency. On the battery manufacturing end, they can bring about environmental benefits while improving industrial scale.
The rapid development of China’s new energy vehicle industry has not only become a strong growth point in the auto market, but has also contributed to promoting the Chinese government’s strategy of carbon neutrality and emissions peaking. According to data released by China’s National Development and Reform Commission in September, the number of new energy vehicles in the country has exceeded 10 million, and the market penetration rate is close to 25%. The focus of the new energy vehicle industry has moved to consumer demand and experience improvement.
The battery swapping field has also attracted the attention of many enterprises. Tesla and XPeng chose to build supercharging stations and charging piles to improve the convenience of electric vehicles to replenish energy. NIO, on the other hand, is taking the route of battery swapping stations to shorten the energy replenishment time.
Compared with charging piles, which take about half an hour, battery swapping that only needs a few minutes has a great efficiency advantage. In addition, when purchasing a car, users can only buy the vehicle itself and rent the power battery, which can dramatically reduce costs for consumers. They also do not have to worry about the depreciation of the car due to battery decay.
This year, one of the seven technology bases released by SAIC is a battery that is rechargeable, exchangeable and upgradable. CATL has also launched its own battery swapping brand, EVOGO. All these have laid a technical foundation for the new joint venture.
Soochow Securities believes that 2022 is the key year for power station’s development. It is expected that more than 16,000 new power stations will be built by 2025, and that investment in new equipment will exceed 60 billion yuan. Avic Securities takes a more optimistic view, forecasting that the number of power stations in China will exceed 20,000 by 2025.