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NEV Plan prefers charging over battery swapping

by Zhou Kaiping

It has been a long debate in the new energy vehicle industry about whether to pursue the slow/fast charging mode or the battery swapping method. It seems that China’s two major battery swapping advocates, the State Grid Corp. of China (State Grid) and China Southern Power Grid (Southern Grid), have made the wrong bet.

The lately released Energy-Saving and New Energy Vehicle Industry Development Plan (2012-2020) (Plan) has detailed the blueprint of building charging facilities and developing key technologies thereof. However little is mentioned about battery swapping.

“The draft of the Plan used to encourage EV charging method supplemented by battery swapping. But the final version left out this content and barely touched on battery swapping, which is supposed to be an experimental option in the future development,” said noted NEV researcher Wang Binggang, who added that battery swapping has actually been marginalized.

In 2011 alone, the two power grid giants had constructed 170 charging and battery swapping stations nationwide.

“All those stations they have built feature the battery swapping method. Power grid companies didn’t think about the possibility that the government will focus on EV charging,” said an anonymous auto analyst.

Power grid companies choose to pursue battery swapping mode because in this way they can control energy supply link: EV power batteries. But the majority of EV manufactures have resorted to the charging mode.

“It is so costly to develop EV charging technologies. If the main direction is battery swapping, the whole vehicle design and R&D would have to be started over,” said Chen Quanshi, professor of Automotive Engineering at Tsinghua University and the country’s leading expert on EV technical standards. 

“Though it is not clearly stated in the Plan, I am sure that private EV adopters will facilitate the charging method, which is highlighted by slow charging in both private and public parking lots,” said Wang Binggang.

The Plan states that battery leasing and other battery services will be explored but it does not standardize specifications of power batteries, which should be crucial to the adoption of battery swapping pattern.

“Batteries made by various EV makers differ from each other in size and shape, which makes it difficult to be swapped and replaced,” said an insider from the battery industry.

Slowed step

Almost half of China’s electric vehicle charging and battery swapping stations lay idle and the State Grid has indicated that it will be more cautious in building EV charging facilities.

“The State Grid will not have massive EV charging station buildout in the future. New station construction has to be based on whether the local place has commercial and mature operating models on new energy vehicles,” said the company president Liu Zhenya.

Shenzhen Auto Electric Power Plant Co., one of China’s largest electric equipment developers and manufacturers, told Auto Business that the State Grid has called for much less bids for charging station compared with the same period last year.

An anonymous source from the company said last year the State Grid had at least three bids every month but this year the bids have been fewer.

Statistics show that by the end of 2011 the State Grid had constructed 243 charging stations and 13,283 charging poles. It has taken in 80 percent of the domestic charging market share.

The company plans to build another 196 charging stations and 1,945 charging poles this year. But it will be more selective about the locations where there are mature EV business models.

According to Liu Zhenya, the company will optimize the operating model of EV charging and battery swapping, and focus on charging network construction in key cities and areas.

“We will prioritize the intelligent charging network construction among the NEV pilot cities,” said Liu.

The slowed step is an echo to the Plan, which says that in the early stage of new energy vehicle development, charging infrastructure construction should be centered in pilot cities.

Better Place, the leading battery swapping practitioner based in Israel which has deep influence on the State Grid and Southern Grid, also has its business in China gone cold.

Better Place had founded an EV partnership with Chinese carmaker Chery Auto in 2010. But since all the core technologies and equipment are controlled by the foreign partner, Chery is not willing to take in them stock and barrel. The collaboration has not been making any progress ever since the release of the Plan.

(Rewritten by Ray Jing based on author’s article in 21st Century Economic Herald)

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