Battery Swapping For Electric Vehicles Could Be A Game-Changer

It’s official — the site in California’s Central Valley, along Interstate 5 at Harris Ranch, is Tesla’s first battery swap station.  As I speculated earlier this month, Tesla unveiled the station last week in a blog post:

Starting next week, we will pilot a pack swap program with invited Model S owners. They will be given the opportunity to swap their car’s battery at a custom-built facility located across the street from the Tesla Superchargers at Harris Ranch, CA. This pilot program is intended to test technology and assess demand.

At least initially, battery swap will be available by appointment and will cost slightly less than a full tank of gasoline for a premium sedan. More time is needed to remove the titanium and hardened aluminum ballistic plates that now shield the battery pack, so the swap process takes approximately three minutes.

With further automation and refinements on the vehicle side, we are confident that the swap time could be reduced to less than one minute, even with shields. Tesla will evaluate relative demand from customers for paid pack swap versus free charging to assess whether it merits the engineering resources and investment necessary for that upgrade.

If the pilot program is successful, and ownership models for the batteries can be determined, Tesla may have just begun a major innovation in electric vehicle driving. The program could herald two major breakthroughs: first, it solves “range anxiety” by allowing drivers to travel long distances without having to endure lengthy and uncertain battery charging sessions at public chargers.  Second, it could potentially decrease the price of the vehicles dramatically by removing the cost of the battery from the purchase price.

How so?  Well, I’m not sure Tesla (and other automakers) would be interested in this second benefit, but they could arrange car purchases where the automaker retains ownership of the battery and leases it to the customers when they purchase the vehicle.  Then when the battery swap happens, a customer is simply swapping one leased battery for another, with a performance guarantee from the automaker on the lease.  The automaker would benefit by ultimately reselling the used batteries for grid storage and other market opportunities (and increasing vehicle sales). The customer benefits by not having to pay for the full cost of the battery (a huge part of the purchase price) and by not shouldering the uncertainty of long-term battery performance.

And to imagine even more possibilities, when you couple the battery lease option with the possible revenue from vehicle-to-grid services performed by plugged in vehicles via grid signals, you have a recipe for a very inexpensive vehicle, an essentially free battery lease, and a better performing grid to boot.


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