CATL Could Make Battery Swaps Pay Off, Finally

Today's column is our second from Dalibor Petkovic, a freelance researcher specializing in Chinese industrial policies. Since 2017, he has focused on the Chinese EV market, as well as smart cities, urban logistics and battery recycling management.

There are two ways to recharge an electric car: Plug it in, or replace a depleted battery with a fully charged one. Chinese policymakers favored battery swaps when they began promoting EVs in 2009. But battery swaps work best when batteries are standardized, so they fit in many types of vehicles. Instead, China’s EV market grew to include more than 150 models of batteries, and automakers resisted the notion of standardizing. By the 2010s, the government was pushing charging instead. 

That left three players in China’s battery-swap market: Nio, a maker of luxury EVs that runs its own network of swap stations; and Aulton and Botann, which operate swap stations for taxis and ride-hail vehicles. Operators and analysts say none of them is making money because they don’t have enough business; analysts say the stations can break even when they fill as few as 20% of their available slots, but none of the operators are yet at that level.