The power exchange mode refers to the rapid power replenishment mode that integrates the centralized storage, centralized charging, unified distribution of a large number of batteries through the centralized charging station, and the battery replacement service for electric vehicles or the collection of battery charging, logistics and exchange services. According to Toubao data, China's new energy vehicle replacement service market is expected to reach 66.9 billion yuan in 2022 according to the annual revenue of the substation, and will reach 1 trillion yuan in 2030.
Source: Head Leopard (Note: This estimate does not yet include the size of the two-wheel electric vehicle replacement market)
First, the development process
In 2007, the world's first battery replacement operating company, Better Place, was founded, but the company declared bankruptcy in 2013 due to immature battery technology, high operating costs and low sales (in partnership with Renault's Fluence ZE model). In 2013, Tesla proposed rapid power exchange technology, but due to policy and inability to achieve commercial profitability, it turned to fast charging technology.
In China, the State Grid first carried out the application research of power exchange technology in the field of new energy passenger vehicles, put forward the commercial operation mode of "power exchange as the mainstay, plug-in and charging as a supplement, centralized charging, and unified distribution", and completed the pilot of 500 pure electric taxis in Hangzhou in 2010 based on high-box standard box technology, which verified the feasibility of the business model of "vehicle-electricity separation and mileage billing".
Since 2014, the exploration of technical solutions such as sub-box power exchange and chassis power exchange has improved the operating costs and energy replenishment efficiency of the substation, and the stability and safety of the vehicle have been improved. However, before 2020, due to the high input cost of the substation, the small number of vehicles for substation, and the imperfect standard, the power exchange mode is mainly based on public transport demonstration projects, and the charging mode is the mainstream of the market.
Since 2020, the subsidy for new energy vehicles has gradually declined, and the purchase cost of the whole vehicle has become one of the constraints for new energy vehicles, with the clear national new energy strategy, the successful exploration of demonstration projects, the progress of battery technology, the outbreak of the new energy automobile industry to establish downstream B-end and C-end demand, the market has entered a period of rapid expansion, and China's new energy vehicle energy replenishment method has entered the stage of parallel development of charging and replacing.
Second, the industrial chain
In the power exchange industry chain, the upstream link is the power exchange equipment and its basic components, the middle reaches are the power exchange operators, and the downstream is commercial vehicles, passenger cars, two-wheeled vehicles and other application scenarios.
Power exchange industry chain
Source: Leqing Think Tank, Huaxin Securities Research
The software and hardware of the upstream substation include power exchange robots, battery equipment, charging chambers, connectors, temperature control modules, positioning modules, monitoring modules and control modules. Domestic power exchange equipment suppliers mainly include Shandong Weida, Bozhong Seiko, Hanchuan Intelligence, HKUST Intelligence, etc. Among them, Shandong Weida and NIO are deeply bound, and the two joint ventures to establish a subsidiary Kunshan Swopu to exclusively supply power exchange equipment for THE NIO second-generation replacement power station; Bozhong Seiko, Hanchuan Intelligent, HKUST Intelligent have rich technical reserves of power exchange equipment, and the products have been replaced by many generations, providing power exchange equipment for traditional car companies such as Dongfeng, BAIC and Geely.
Power exchange equipment supplier
Source: Official websites of various companies, Huaxin Securities Research
The midstream power exchange operators, together with battery banks (battery asset companies), vehicle companies, consumers, and power grids, constitute the industrial ecology of separation of vehicle and electricity, and form a closed loop of business models through battery cascade utilization and recycling. At present, the main players of passenger car replacement operators are Weilai, Aodong and Botan, and by the end of 2021, the three have built 789, 402 and 107 power stations respectively. The main participant in the power exchange of commercial vehicles is Jiuhang Energy.
Power exchange operators and battery asset companies connect the upstream and downstream of the industrial chain
Source: Gaz Auto, Huaxin Securities Research
Among the mainstream operators, Weilai Substation is independently built by car companies, and plans to build a total of 4,000 substations worldwide by 2025, including more than 1,000 in overseas markets. Aodong and BAIC, SAIC and other established car companies jointly build and operate substations, develop power replacement models, and plan to complete 10,000 substations by 2025. BAIC's Optimus Prime plans to build a total of 3,000 optical storage and substations by the end of 2022; Geely and Lifan have joined forces to set up a joint venture to launch a new car series and complete 5,000 substations by the end of 2025. GCL Energy plans to build at least 5,000 substations by 2025. The State Grid plans to build 1,000 public and commercial substations by 2025. The State Power Investment Corporation plans to increase investment in holding 4,000 substations by 2025. Sinopec plans to build 5,000 intelligent charging and replacement power stations by 2025.
The operation of the substation is a heavy asset industry, and the initial investment is high. According to the GCL Energy Co., Ltd. announcement, the construction cost of a single station of passenger car replacement power station is about 2.6 million yuan, and the construction cost of a heavy truck replacement power station is about 4.2 million yuan. In addition to the construction costs of the substation, the operator also needs to bear the battery investment, line investment, etc., and the investment required for single passenger vehicles and heavy truck substations can reach 5 million yuan and 10 million yuan respectively.
The downstream of the power exchange industry chain has rich application scenarios in the fields of heavy trucks, buses, taxis and online ride-hailing cars, private cars, and two-wheeled electric vehicles. From the perspective of vehicle use, the power exchange models of traditional car companies are mainly operating cars, supplemented by private cars; the new forces are mainly engaged in the private car market. Compared with private cars, operating vehicles have a high charging frequency and are more sensitive to charging time, which may become the first scene of the power exchange mode.
Heavy trucks: The demand for replacing heavy trucks has exploded
At present, the number of heavy trucks in China exceeds 8.5 million, and due to the large fuel consumption and carbon emissions, it is the focus of electrification. According to the statistics of tram resources, a total of 10,513 new energy heavy-duty trucks will be sold in 2021, and the annual sales will break through the 10,000 mark, greatly exceeding market expectations. Among them, 3228 heavy trucks were sold (accounting for 30.70%). The advantage of changing the heavy truck relative to the charging heavy truck is first of all that the energy replenishment speed is fast, and the charging heavy truck even if the double gun fast charging method is used to replenish the energy for more than one hour, and the power exchange is generally only five minutes, which can solve the pain point of the electric heavy truck energy filling. Secondly, in the power exchange mode, the purchase of heavy trucks in the form of vehicle-electricity separation can significantly reduce the cost of car purchase. In addition, in terms of use costs, the electricity cost of changing heavy trucks plus battery rental costs totals about 1.2 yuan / kwh, and under the same conditions, the annual operating costs of bicycles for changing heavy trucks are about 100,000 yuan lower than those of fuel heavy trucks. According to commercial vehicle insurance data, in January 2022, the national sales of electric heavy-duty trucks were 2263 units, and the electrification penetration rate continued to climb to 7.07%, of which the sales volume of heavy-duty trucks for replacement was close to 100%. Heavy-duty trucks are accelerating the electrification process in the field of commercial vehicles with timeliness and economy, and may become the first sub-track for the new energy replacement model to be popularized.
Passenger cars: Operating cars are beginning to take shape, and private cars are gradually infiltrating
Domestic veteran car companies have entered the power exchange industry, and new forces have gradually tested the water. Among them, Dongfeng and Geely have launched 4 and 3 power exchange models in the past two years, and have an active layout of the power exchange mode; BAIC has the earliest layout of the power exchange industry, with EU5 as the main power exchange model; SAIC Motor launched the Roewe Ei5 in March 2021, officially entering the power exchange industry; among the new forces, in addition to the support of all models of Weilai, WM and Nezha also launched power exchange models as a test of the power exchange industry.
Third, the business model
Power exchange technology mainly solves the problem of maintaining the stability of the battery connection with the car when the battery is removed and loaded. At present, the passenger car power exchange technology route on the market mainly includes two types: sub-box power exchange (also known as subcontracting power exchange) and chassis power exchange (also known as whole package power exchange). Chassis power exchange does not change the weight of the front and rear axles of the body, can achieve automatic power exchange, greatly shorten the power exchange time, Weilai, Aodong, BAIC new energy are the use of chassis power exchange; the compartment exchange versatility is good, easy to achieve standardization, Lifan, Botan Technology to take this technical route.
Comparison of passenger car exchange technology routes
Source: GGII
Commercial vehicles (such as heavy trucks, mining trucks) power exchange technology route is divided into three types: overall single-sided, overall double-sided, and ceiling-mounted power exchange.
The ceiling suspension type power exchange adopts a cable hoisting battery pack, which can be compatible with specific parking errors due to the flexibility of the steel cable. Therefore, the ceiling-mounted power exchange technology is simple, low cost and good feasibility, which is the earliest commercial means.
The overall unilateral power exchange has a high degree of intelligence, and the requirements for driver professionalism are low. However, due to the rigidity of the battery grasping mechanism, if the vehicle parking position deviates from the established position, it is easy to cause damage to the guiding mechanism, and due to the high requirements for control accuracy, it is necessary to support lidar and visual sensors and other equipment, resulting in a higher cost than the ceiling type power exchange.
The overall double-sided power exchange advantage is that the battery does not occupy the container space, which is more suitable for mining cards with limited battery storage locations, and fits the specific needs of models with double-sided batteries. However, due to its need to be equipped with two sets of robots and battery storage charging silos at the same time, the cost is relatively high.
Comparison of commercial vehicle replacement technology routes
Depending on the service object, the substation can usually be divided into three categories: the first is the commercial vehicle substation, which is usually suitable for heavy-duty electric commercial vehicles with relatively fixed lines in the (semi-) enclosed area. The second is the centralized substation that mainly serves electric taxis and online ride-hailing vehicles, which does not require a high number of outlets, usually does not involve special occasions such as highways, and represents the enterprises such as BAIC and Aodong New Energy. The second is suitable for private passenger car replacement power stations, due to the randomness of the private car trajectory, this type of service has extremely high requirements for the number of outlets, and must take into account various occasions such as urban areas and highways, typical enterprises such as Weilai. Recently, the power battery giant Catalonia times has also launched a passenger car replacement business, and plans to open the power exchange service to different car companies at the same time, which has won the general attention of the industry.
The key technologies of power exchange include mechanical connection technology, electrical connection technology, liquid cooling connection technology, monitoring technology, etc., which are currently relatively mature. With the continuous application of power exchange models, the focus of key technologies for new energy vehicle power exchange has begun to focus on the speed and safety of power exchange, the reliability and durability of the electrical connection, the safety and long life requirements of the power exchange battery.
Progress in power-swapping technology for new energy vehicles
Fourth, market space
In 2021, sales of new energy vehicles increased by 157% year-on-year to 3.52 million units, accounting for 13.4% of total vehicle sales from 2.7% in 2017. The number of new energy vehicles reached 7.84 million units in 2021, an increase of 59% year-on-year, and the proportion rose from 0.7% in 2017 to 2.6%.
According to the forecast of the China Automobile Association and the guidelines of the "New Energy Vehicle Industry Development Plan", the annual sales of automobiles in China are expected to reach 30 million in 2025, of which new energy vehicles will account for 20%, with annual sales of 6 million vehicles. According to the sales forecast and the current ownership accounting, the number of new energy vehicles will exceed 27.7 million in 2025, and the four-year CAGR will be 37.1%. At that time, the proportion of new energy vehicle ownership will increase from 2.6% in 2021 to 6.7% in 2025. With the rapid development of new energy vehicles, related supporting facilities will also usher in major opportunities.
The current charging mode is the mainstream of the market. According to the statistics of the China Charging Alliance, by the end of 2021, the mainland has a total of 75,000 charging stations and 1,298 replacement power stations. After 10 years of development, charging piles have formed a certain scale nationwide. However, compared with charging, the power exchange mode can reduce the energy replenishment time to improve the revenue of the driver of the operating vehicle, the centralized standard charging and maintenance can reduce the safety hazard of the battery and prolong the battery life, the separation of vehicle and electricity can reduce the user's initial purchase cost, and the staggered peak centralized charging can reduce the power grid load, so it has attracted more and more attention.
Comparison of the three ways of replenishment
Source: International New Energy Network, Jingneng New Energy, Pacific Automotive, Prospective Industry Research Institute, EVCIPA
Fifth, economic feasibility
Operating vehicles such as taxis and ride-hailing cars value profitability, and after only considering the monthly income and recharge costs, the monthly income of drivers in the power exchange mode has increased. Assuming that the taxi driver works a total of 12 hours a day (including the replenishment time), travels an average of 40 kilometers per hour, refers to the Beijing taxi charging standard, and charges 2 yuan per kilometer after exceeding the starting price, and the taxi battery capacity is 60kwh (referring to the BAIC EU5 model), and the remaining power is 20% for replenishment. It has been calculated that in addition to the recharge cost, the single-day income of the use of fast charging is 843 yuan, the single-day income of the use of power exchange can reach 876 yuan, and the monthly income of the driver can be increased by about 1,000 yuan.
Comparison of daily income of drivers in fast charge and battery swap modes
Source: Tianfeng Securities Research Institute
Commercial vehicles such as heavy trucks serving coastal ports, large logistics parks, mining areas and other places have high power consumption and more times of energy replenishment in a single day; at the same time, the battery capacity is large and the charging time is longer. After the power exchange, the operation time can be effectively improved and continuous operation can be achieved. Heavy-duty truck batteries generally have a capacity of 282kwh, a cruising range of 150-200 kilometers, and a single-day driving range of 300-500 kilometers, which needs to be replenished twice a day. Fast charging time is 1-1.5 hours / time, and power change can save 2-3 hours of working time for drivers compared with fast charging, improving profitability.
Domestic pure electric heavy-duty truck models and parameters
Sixth, policy encouragement
The power exchange mode policy warm air blows frequently. In April 2020, in order to encourage the development of a new business model of "power exchange" and accelerate the promotion of new energy vehicles, it was clarified that "power exchange mode" vehicles are not subject to the subsidy policy of less than 300,000 yuan (including 300,000 yuan) before the subsidy for new energy passenger vehicles. In May 2020, the State Council for the first time expressed charging piles and replacement power stations in the "2020 Government Work Report" as a part of the "new infrastructure". Since May 2021, Chongqing, Hainan and Dalian, Liaoning Province, have successively promulgated subsidy standards for substation replacement, with reference to the single station investment of 5 million yuan in passenger car replacement power stations, and a one-time construction subsidy of up to 1.5 million yuan can be obtained to accelerate the construction speed of the replacement power station. With the rapid growth of the replacement power station in the future, various provinces and cities may successively introduce subsidy standards. In November of the same year, the Notice of the New Energy Automobile Industry Development Plan (2021-2035) clearly encouraged the application of the power exchange mode.
The technical standards for power exchange are moving towards unification. In April 2021, the "Electric Vehicle Replacement Safety Requirements" was released as the first basic general national standard in the field of power exchange, and began to be implemented in November, the document made clear provisions on the design of power exchange vehicles, power exchange interface connection, battery pack functions and related monitoring requirements, from the mechanical strength, electrical safety and environmental adaptability of the three angles to ensure the use of power exchange vehicles safety, for the development of power exchange mode to provide standard support, guide the development of the industry reasonable specifications. In December 2021, the "Construction Code for Electric Passenger Car Sharing and Substations" jointly formulated by battery suppliers Ningde Times and Sunwoda, automakers GAC Group, Weilai, BAIC BJEV, third-party operators Botan Technology, GCL Energy, Aodong New Energy and other parties was officially released, and the standards for substation replacement stations were stipulated in 12 aspects such as battery packs, power exchange mechanisms, and substation layout planning, of which Part 5 of the "Construction Code" specifically requires battery pack technology. Factors such as the size, power and voltage of the battery pack of the chassis-type power exchange passenger car are specified. Due to the compatibility requirements of different substations, the battery pack inclusion size is limited to the range of length not more than 2100 mm, width not higher than 1540 mm, and height not more than 280 cm, and four typical battery replacement battery packs are recommended according to the two shapes, which puts forward reference standards for the unification of battery pack size in the future. On February 24, 2022, Shanghai issued the Implementation Opinions on Further Promoting the Construction of Charging and Replacing Infrastructure in Shanghai, which proposes to explore the sharing model of power exchange services in advantageous areas. Accelerate the formulation of local standards for power exchange models, power exchange equipment, and the construction of power exchange field stations, break down the barriers to the application of power exchange technology across brands and models, and promote the formation of unified power exchange standards in major application areas such as special vehicles and passenger cars.
The pilot work was officially launched. In October 2021, the Ministry of Industry and Information Technology issued the "Notice on Launching the Pilot Work on the Application of the New Energy Vehicle Power Exchange Model", selecting 11 pilot cities according to the policy intensity and power exchange experience and other factors, including 8 comprehensive application cities (Beijing, Nanjing, Wuhan, Sanya, Chongqing, Changchun, Hefei, Jinan), 3 cities with heavy truck characteristics (Yibin, Tangshan, Baotou), with the goal of promoting more than 100,000 power exchange vehicles and building more than 1,000 new substations. As the first stage of the nationwide promotion of power exchange, the pilot city will accelerate the formation of replicable experience in the power exchange industry.
At present, the power exchange industry is still in the early stage of development, with reference to the development history of charging piles, with the gradual unification of the future power exchange industry standards and the gradual improvement of the subsidy policies of various provinces and cities, the power exchange model will usher in the outlet, and the future is expected to achieve explosive growth.
Author: Dr. Zhang Jinxin, Chengtong Fund Management Co., Ltd
Draft: Zuo Zihan