【China Commercial Vehicle Forum】Du Pengyu: Analysis and trend judgment of the development of battery swap mode for heavy trucks

From March 26 to 28, 2024, the 2024 China Commercial Vehicle Forum was held in Shiyan City, Hubei Province. Hosted by the China Association of Automobile Manufacturers, with the theme of "New Pace, New Results, New Improvement, Helping the High-quality Development of the Commercial Vehicle Industry", this forum is based on the high-quality development requirements of the industry, the realization of the national "double carbon" goal, the transformation and innovation needs of the automobile industry, and promotes reform, transformation and development with innovation, so as to help the high-quality development of the commercial vehicle industry. Among them, on the afternoon of March 28, at the "Theme Forum IV: Research and Judge the Development Trend of Commercial Vehicles and Tap the Potential of Market Segments", Du Pengyu, Research Director of Kerui Zhuoxin (Beijing) Consulting Co., Ltd., delivered a wonderful speech. The following is a transcript of the speech:

Ladies and gentlemen, good afternoon, it is a great honor to be here to participate in this China Commercial Vehicle Forum. Next, on behalf of Kerui Consulting, I would like to share our analysis of the development of the battery swap mode of heavy trucks and our judgment on the trend. This sharing is divided into four parts:

First, a review of the performance of the battery-swapping heavy truck market.

First, let's take a look at the overall market performance of commercial vehicles. Since the withdrawal of subsidies in 2022, the new energy commercial vehicle market has been detached from the policy-driven and officially entered a market-driven stage, which can be seen that although the sales volume declined in January 2023, it was a steady increase in the following months, both in terms of penetration rate and month-on-month growth. From January to February this year, we can see that the cumulative sales of 44,500 units increased by 67.5% year-on-year, while the penetration rate reached 12%, far exceeding the penetration rate of 5.6% in the same period last year. Therefore, at present, new energy commercial vehicles generally maintain a high growth rate.

In the market segment, we can take a look at the current market segment with the largest proportion of light buses, which are still the main force of new energy commercial vehicles, but we can see that from 2021, the proportion of new energy in card products is gradually increasing, and in 2024, the proportion of light buses will decline, and the new energy penetration rate of heavy trucks, light trucks, and micro trucks has been improved.

In terms of specific models, after the subsidy was cancelled in December 2022, the new energy penetration rate of large buses and medium buses has declined sharply, from 80% to 40%, while light passenger products are mainly commercial-based, similar to the use of card systems, so its penetration rate has increased by 40%. In the truck category, it is obvious that the cancellation of new energy subsidies has not had much impact on truck products. From 2022 to 2023, the penetration rate of heavy trucks and light trucks will maintain steady growth, and the new energy penetration rate of heavy trucks will reach 9.4% in February and March this year, which is also related to the decline in domestic sales of traditional heavy trucks. But in general, the penetration rate of 9.4 has also broken through a record high, and the penetration rate of new energy heavy trucks is a very high point.

Then we focus on new energy heavy trucks, we can see that in 2021, the new energy heavy truck market will officially reach about 10,000 units, and in 2022 and 2023, it will be steadily improving, and the growth rate of heavy trucks in January and February this year has reached 116%, of which the growth rate of battery-swapping heavy trucks is 58.4%, lagging behind the high growth rate of 198.1% of charging heavy trucks, and the share has fallen. 15,000 battery-swapped heavy trucks will be sold in 2023 and 2,300 units will be sold from January to February 2024. We can see that in 2021, new energy heavy trucks will only begin to increase, and by 2023, they will still be in the initial stage of the market. In this case, whether it is battery replacement or charging, a large order can affect its share. So on the whole, the overall trend of battery replacement heavy trucks is still relatively optimistic.

Second, why can the battery swap mode of heavy trucks rise?

First of all, the battery swap mode has a long history, in 2007 in the field of passenger cars began to do demonstration operations, but due to the high cost, and subject to the structure of the chassis, has not been widely promoted. By 2019, the national policy began to restart battery swapping, and the battery swap station was included in the new infrastructure, and the technology of battery swapping was put back on the agenda. Since 2021, the application of new energy commercial vehicles, especially heavy trucks, has given new vitality to the battery swap mode in the field of commercial vehicles.

There are many objective factors, especially the positive support and reverse promotion of national policies, including energy strategy, fuel consumption regulations, environmental protection policies, road restrictions, etc., are an obvious guiding role, and the positive can be seen through incentives, subsidies for demonstration operations in key areas and key scenarios, as well as preferential treatment such as the right of way. The reverse angle is fuel consumption regulations, environmental protection policies, etc., which lead to users and manufacturers must switch to new energy.

Here we mentioned fuel consumption, environmental protection is still limited, but there is also a very important regulation, which has not been implemented or put on it, that is, double points. In 2022, Geely proposed to implement the double points of commercial vehicles at the two sessions, why has it not been implemented? So we still have some time to get used to. At present, all commercial vehicle companies have basically begun to deploy new energy commercial vehicles, whether it is pure electric, battery swapping, hybrid, hydrogen fuel cell, etc., these routes have begun to be deployed.

There are two most important factors why the battery swap mode can rise, the first point is that the battery swap mode makes up for the shortcomings of the charging and hydrogen fuel routes to a certain extent. The core pain point of the charging route, the first is the range anxiety, that is, its battery life is always not up to the requirements, if he wants to use a large battery, its cost will rise, and the second is that its cargo space will decrease. Therefore, the anxiety of wave range and charging anxiety leads to the inability of new energy charging heavy trucks to be applied on a large scale, so it leads to not making money. The core pain point of the hydrogen fuel route is that the initial purchase cost is too high and the energy supplement cost is too high. After the comparison of the core advantages of the battery replacement heavy truck is reflected, first of all, the battery replacement heavy truck is the vehicle electricity separation, the form of battery bank, the cost of the vehicle is reduced very much, and the user's acceptance will be higher. Second, the time for battery replacement is shorter, and the battery replacement is 5 minutes, which reduces the user's waiting time and improves the transportation efficiency. Changing the battery, the replaced battery is charged in the valley section, so the price of electricity is relatively low, and slow charging will also prolong the service life of the battery. Finally, the advantage of TCO cost, the cost of the battery is stripped, and the corresponding loan, insurance, maintenance and other expenses are reduced, and the TCO cost advantage of battery replacement is greater than that of charging. Therefore, the first main reason is that the battery swap mode makes up for the shortcomings of hydrogen fuel to a certain extent.

The second important factor is that battery swapping is only a model innovation, and there are no technical barriers. We look at the ecological chain of car companies in the battery swap mode, which is currently only a small radius, and the core roles include power battery companies, battery asset companies, etc. Due to the low investment and no technical barriers, car companies quickly launch products to seize the market and promote the market under such a low-investment and low-risk situation. Before 2022, the new energy heavy truck market is basically monopolized by new forces, not that traditional enterprises have no market, they are just making reserves, because the cost of batteries was too high at that time, and the loss after sales was too large, so all traditional head companies did not actively promote the sales of heavy trucks, but made technical reserves. Since the beginning of this year, the price of raw materials for power batteries has dropped sharply, and at this time, sales and costs have been relatively balanced, and traditional car companies have begun to exert their strength.

At the same time, the capital is willing to do the battery swap ecology, the capital and the power battery company, in the battery swap ecological chain plays a very key role, they want to dominate the ecology, so as to obtain greater profits, so they spare no effort to promote the development of battery swap. At present, we can see battery recycling, cascade utilization, power grid, so many links, so many industries participate in the mode of battery swap ecological chain, making this ecological chain very stable, and will gain greater economic vitality, which is also one of the main reasons why the country began to pay attention to the battery swap mode.

Therefore, based on these two factors, one is that battery swapping can make up for the shortcomings of charging and hydrogen fuel cells, and the second is that all aspects of various enterprises, especially power batteries and investors, have more possibilities for profit in the battery swap mode, so they are actively promoting the battery swap mode, which is the main reason why the battery swap mode can rise.

Third, is the battery swap mode the optimal solution for new energy heavy trucks?

First of all, let's take a look at the application of new energy heavy trucks, which currently has great limitations.

We can see that the current new energy heavy trucks are mainly used in short-distance, high-frequency, such as ports, steel mills, power plants, municipal sanitation, etc., and a large number of express transportation, LTL and urban distribution logistics have not applied new energy heavy trucks, so it can only involve 20% of the total share of the application scenarios, resulting in the sales scale of new energy heavy trucks has been unable to achieve a large breakthrough. If the new energy heavy truck wants to make a large-scale breakthrough in quantity, it must break through this traditional application scenario, which is the core.

What are the main characteristics of the current application scenarios of new energy heavy trucks? These scenarios just mentioned have more commonalities, such as very fixed routes, bulk commodities, and short and medium distances. For the requirements of continuity, in addition to the municipal sanitation he has relatively low requirements for continuity, and the demand for energy supplement is relatively low, the others have certain needs. For the average daily mileage, it is about 100 to 200 kilometers, which is such a characteristic.

Let's compare the difference between the battery swap mode and the charging mode for the application of the scenario, the battery swap mode has the characteristics of high frequency, high compliance and high transportation efficiency for scenarios that need continuous operation, such as ports, steel mills and mines, etc., and the battery swap mode can well adapt to these requirements. The charging mode is more suitable for transportation scenarios with low frequency of use and low requirements for timeliness, and in these scenarios, the battery swap mode can be perfectly replaced. Therefore, in terms of adaptability of application scenarios, the battery swap mode is better than the charging mode.

Let's take a look at the breakthrough in the transportation scenario, the Ningxia line from Ningxia to Xiamen, which was led by CATL last year, as well as the Chengdu-Chongqing line, as well as the 1,000-kilometer battery swap corridor and battery swap network from Shaanxi, Gansu, Inner Mongolia to Hebei that may develop this year. It is all shown that the battery swap mode has begun or is about to break through to this long-distance transportation scenario. At present, it is still very difficult for the charging mode and fuel cell to break through to the long-distance transportation scenario, and the charging is mainly a breakthrough in battery technology, and it is difficult to balance the load between large battery life and large power. The construction of fuel cell networks and the development of key components are also very difficult. Therefore, at present, the battery swap mode is less difficult to break through the long-distance transportation scenario, and it has been ahead of charging and fuel cells.

Of course, there are also many shortcomings in the battery swap mode, such as the lack of a unified industry standard, which is the core and there is no unified standard. There is also a battery swap station, the infrastructure of the battery swap station, and some profitability issues, etc., which will not be detailed. In February this year, the State Power Investment Corporation () has been approved to pilot the battery swap of heavy trucks and the R&D and operation of hydrogen energy, representing the country to increase its efforts in the direction of battery swap mode. The industry giant CATL has a clear attitude towards the expansion of the battery swap business, and it can be said that it is sparing no effort to promote it in an all-round way. CATL is a leader in the industry, he is very optimistic about the battery swap industry, and he is also actively promoting many improvement measures and programs. However, even so, the operation of the battery swap mode is complex, the capital investment is large, and the profitability of the main engine factory is low.

Therefore, I conclude that the battery swap mode is an important transition node for the new energy of heavy trucks, but it is not a final explanation. The shortcomings just mentioned, coupled with the constraints of product structure and user convenience, the battery swap mode is only the best solution for new energy heavy trucks under the current situation.

We can put the three stages of new energy development of heavy trucks, the first stage, closed scenes, short-distance transportation, this time is mainly to charge and replace heavy trucks. The second stage, to the medium and long-distance transportation advanced, that is, 25 to 30 years of the stage, at this time the battery replacement heavy truck + large power heavy truck will dominate the market. The third stage is the stage of real breakthrough in long-distance transportation, which is the world of high-power medium trucks + hydrogen fuel heavy trucks. However, even if the technology of high-power heavy trucks breaks through, the battery-swapping heavy truck still has better applicability in the high-frequency and heavy-load scenarios we just mentioned, and it will not be completely eliminated. Before the endurance of energy storage batteries, as well as the qualitative breakthrough in price, and the difficulties of hydrogen fuel routes are fully solved, the battery swap mode will still occupy a large market share for a long time.

Fourth, the future development prospects of the battery swap mode.

First, whether it is battery replacement, charging or hydrogen fuel, etc., the mainstream direction of new energy heavy truck products is positive research and development, in the early oil to electric models are indeed very popular, because it is very convenient and fast, but in the long run, the power battery layout of oil to electric models is limited, and the limited mileage is inevitable, so the new energy heavy truck based on positive research and development is a core mainstream direction.

Second, bottom battery swapping has become a major trend, and in 2023, there will be a variety of bottom battery swap heavy trucks in the market, all of which use CATL batteries and CATL's latest Qiji battery swap solution. CATL has a very far-reaching layout in the area of battery swapping, and I think it is an inevitable trend to swap batteries at the bottom, because it is not only a vehicle with a low center of gravity, high safety, First of all, the reason for the non-uniformity of standardization is that there are no technical barriers, you buy a battery to make a battery pack, I buy a battery to make a battery pack, resulting in battery swap facilities can not be universal, so sharing can not be realized, and the battery swap scheme made by CATL has now been adopted by many enterprises, and CATL is doing battery swap special lines, and many enterprises have achieved the unity of standardization. When other companies come in, do they also have to use CATL's batteries to reach an agreement with it, once he releases this model, it is possible that our industry will be dominated by Ningwang again. However, the experts who spoke just now also said that Jiefang is now also doing this ecology, and enterprises or institutions with long-term goals have also seen the advantages of the battery swap mode and are also actively deploying.

Finally, make a forecast for the sales of new energy commercial vehicles, after early pilot demonstration operations, the new energy heavy truck market will officially exceed 10,000 in 2021, and continue to increase in the past two years, the penetration rate has exceeded 5%, according to the market segment, the main force of new energy heavy trucks has also changed from the early special vehicles to tractors. It is conservatively predicted that the sales volume of new energy heavy trucks will exceed 70,000 units in 2025, the penetration rate will exceed 10%, and the market size will exceed 150,000 units in 2030.

Fifth, Kerui Consulting is an information supplier focusing on the automotive field, serving 300+ customers in the industry, and has accumulated 15 years of consulting service experience. Our core services are in the field of commercial vehicles. Provide enterprise customers with sales, product, brand, supply chain and other monitoring insight and strategy research services. The main focus is on sales, product, brand and industry research.

Finally, we welcome colleagues and celebrities in the industry to give advice, communicate with each other, and work together to seek the high-quality development of China's commercial vehicles. Thank you for your patience!

(Note: This article is based on on-site shorthand and has not been reviewed by the speaker)

Source: China Commercial Vehicle Forum