Published 17 March 2025
Since the inception of EVs, the concept of battery swapping has been part of the discussion on the economics of electrification. While EV sales have increased over 400% in the past five years, battery-swapping technology has struggled to gain traction, with companies facing difficulties in securing market share. Recently battery-swapping particularly in China has been making headlines, especially as CATL announced the launching of its own battery-swapping units, and the city of Shanghai announced it would subsidise the construction of swapping stations.
NIO dominates China’s swapping industry
NIO has been the leading force in the battery-swapping industry in recent years, with its EV sales surpassing 220,000 units in China last year, a 40% year-on-year increase, according to Rho Motion’s EV & Battery database. This growth has been supported by the expansion of its swapping station network, with the company now operating over 3,100 stations across the country, 69% of China’s total swapping network. Alongside its battery-swapping expansion, NIO has also grown its charging point network, now operating over 25,000 charging points across China.
In addition to scaling its infrastructure, NIO has strengthened its industry presence by forming partnerships with Chinese automakers. Despite these developments, investor confidence in the brand remains subdued, with its share price dropping 46% in 2024. The company remains unprofitable, and according to Rho Motion’s Energy Transition Capital Monthly, its operating income ratio stood at -37.5% for the first three quarters of 2024.
Other battery swapping players
Aulton, China’s second-largest battery-swapping operator, focuses solely on swapping stations, with over 700 in operation across the country. However, its network is limited, as only 30 vehicle models, many of which are taxis, are compatible with its system. It has built out partnerships a number of notable automakers including GAC Aion, BAIC and SAIC.
The third-largest battery-swapping operator is e-energee, a Gelly associated company. In 2021, Geely announced its aim of building 5,000 swapping stations by 2025. To date, e-energee has built just 387 stations highlighting the challenges of the market.
CATL’s entrance into the swapping space could cause disruption
In December 2024, CATL officially announced the launch of its two standardised “Choco-Swap” swapping batteries, 20# and 25#. Each of these models comes in both LFP and NCM variants. CATL aims to build 1,000 “Choco-Swap” swapping stations in 2025 which would make it the second-largest operator in China. In CATL’s mid-term plan it aims to establish 10,000 swapping stations along with its partners.
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Unlike NIO, CATL is building out a network of partnerships with automakers before investing and building out its own network. NIO on the other hand invested heavily into its network, before finding and establishing partnerships with automakers.
What challenges does the battery swapping industry still face?
Battery swapping has notable benefits including fast charging times, the opportunity to partake in grid balancing services, and improved battery maintenance. However, standardisation remains the biggest challenge. Each EV brand has unique battery designs, limiting compatibility. At China’s recent Two Session’s meetings, the CEOs of GAC and Chery both called for standardisation of the swapping industry. Universal standards would enable wider adoption, fostering competition, and ultimately lower overall costs in the long term.
More Information
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Image credit: NIO
Source: https://rhomotion.com/news/are-battery-swapping-evs-heading-towards-mass-adoption-in-china/
