The expansion of the battery leasing service market is catapulted by the thriving electric vehicles industry across the globe. Moreover, increasing government focus on drafting policies regarding electric vehicles (EVs) and EV batteries is also boosting product adoption. Additionally, the mounting presence of companies turning toward growth tactics such as innovative product development and fund-raising are positively impacting the competitive landscape of the global battery leasing service industry.
Battery leasing forms a crucial part of the battery swapping model, a process wherein a depleted battery is swapped with a fully charged one. It plays a key role in separating the ownership of the battery and reduces expenses that EV owners incur.
Battery leasing services offer several benefits, such as affordability and maintenance of power pack, among others. Due to its various advantages, the battery leasing service market share is set to exceed a valuation of USD 400 million by 2028, as per a report by Global Market Insights Inc. Following are some recent strides taken by major companies in the global market to gain a competitive edge in the industry.
- Octillion Power Systems
An advanced lithium-ion storage systems provider for electric mobility, the company has initiated a new demonstrator program for battery leasing to enable fleet customers to lease batteries upon purchase of a vehicle. Introduced in August 2020, the program allows participating fleet operators to source batteries with a five-year-long lease-to-own program without the need for up-front payment.
The demonstrator program was intended to gather information on battery degradation, examine the second-life viability of the used batteries, and evaluate fleet-operation-use models. The goal of the program was also to help Octillion Power Systems establish market cases for conventional financing groups that are looking to penetrate the battery leasing service industry but have concerns pertaining to the tech involved.
By leveraging leasing to boost the uptake of electrical commercial vehicles, fleet operators are enabled to instantly tap into ownership benefits that are promised by electric vehicles as compared to internal combustion engines (ICE)-run vehicles. This move is helping the company fortify its standing in the electric vehicle battery swapping landscape.
2. Ample, Inc.
Making its way further into the EV battery swapping sector, in August 2021, Ample, a San Francisco-based startup reimagining energy delivery solutions for electric vehicles, raised USD 160 million in its Series C round. The firm allocated the funding towards scaling its battery swapping service.
As per Ample’s approach, cars equipped with its modular battery pack could drive into any of its automated charging pod locations and swap out or replace their depleted batteries with fully charged ones. The batteries that are swapped out are then recharged in the pod and are ready for reinsertion into another vehicle.
With this seemingly straightforward battery swapping model, Ample proposed to think about EV batteries in an entirely novel manner. This essentially means that rather than recharging an EV battery like a smartphone, the company wants to transform them into things like batteries in a digital camera that are easily swappable.
3. NIO
NIO, a key manufacturer in the Chinese electric vehicles market and parent organization of NIO NextEV Limited, unveiled a battery leasing service that would allow drivers to purchase an EV without having to buy the battery pack, which is one of the most expensive components of an EV.
Launched in August 2020, the battery-as-a-service was designed to lower the starting price of the company’s cars and involves the driver paying a rental fee every month to use the batteries. Drivers can swap depleted batteries for charged ones at any of NIO’s 143 battery swapping stations across the region as part of the BaaS model.
A company established by Chinese battery makers, including energy storage giant Contemporary Amperex Technology Co. Ltd., agreed to supply batteries for NIO’s service. Growing attention on promoting the adoption of vehicles with swappable batteries between different models and makes is set to fuel battery leasing service market size growth.
4. Sun Mobility Private Limited
Sun Mobility, an energy infrastructure & services provider for EVs, inked a partnership agreement with Hero Electric, an India-based manufacturer, for the deployment of electric two-wheelers integrated with Sun Mobility’s smart swappable battery tech. As part of the deal announced in March 2022, the two companies have scheduled deployments over the following three months, targeting about 10,000 electric two-wheelers by year-end.
This move came at a time when NITI Aayog, the Indian government’s public policy think tank, was working on rolling out a battery swapping policy. The firms aimed to leverage the booming battery electric vehicle landscape in India, especially in the country’s biggest vehicle markets viz., two- and three-wheeler EVs.
5. Gogoro Inc.
Gogoro, a leading specialist in battery swapping systems that support sustainable urban mobility, entered into a strategic partnership with Gojek, a GoTo Group company and a major on-demand service platform in Southeast Asia, to electrify two-wheeled transportation in Indonesia. Announced in November 2021, the deal brought together two of the most innovative and sustainability-focused tech firms in Asia that are focused on ushering in a new era of urban transportation.
The alliance between the firms initially encompassed two vital areas of cooperation, one of which was the cooperation between Gogoro, Gojek, and Pertamina on a battery swapping as well as Gogoro Smartscooter pilot program in Jakarta.
What’s in the cards for battery leasing service market?
To summarize, rising climate consciousness, coupled with government policies focused on encouraging EV adoption, has driven sales of electric vehicles in the past few years. Going forward, surging need for watertight regulations governing the EV landscape, including all EV components, is slated to primarily foster battery leasing service market outlook in the future.
