The construction and operation of battery swapping stations


Business Model Description
Battery swapping of electric vehicles: centralized charging stations that include centralized storage, centralized charging, unified distribution of a large number of batteries, and battery swapping at the station. The stations can charge vehicle owners of battery rental and swapping fees. (5) (6)
Expected Impact
Battery swapping stations can promote new energy vehicles, reduce emission, extend the service life of batteries, and mitigate environmental pollution
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- China: Zhejiang
- China: Inner Mongolia
- China: Jiangsu
- China: Hebei
- China: Henan
Sector Classification
Renewable Resources and Alternative Energy
Development need
China's current energy structure dominated by fossil energy. Fossil energy resources are limited and can release large amounts of carbon dioxide when burt, accelerating global climate change and extreme weather events. Thus, renewable energy is crucial to China's green transformation and energy security. (1)
Policy priority
The proportion of non-fossil energy in total energy consumption should be increased to about 20%. State Council's action plan for carbon peaking stated that wind and solar power generation, biomass power generation and heating should be developed. By 2030, the total installed generation capacity of wind and solar power will reach above 1200 gigawatts. (1)
Gender inequalities and marginalization issues
Renewable energy employs about 32% women, compared to 22% in the energy sector. (2)
Investment opportunities introduction
The IOAs in the renewable energy sector center around the utilization of solar energy, wind energy, and biomass energy.
Key bottlenecks introduction
The energy endowment and demand don't match. Hydropower generation is centralized in southwest China, while wind and solar energy are centralized in northern China, which is far away from the centers of consumption in the eastern and coastal areas. The instability of renewable energy poses a challenge to the consumption and stable operation of the grid.
Alternative Energy
Development need
The transportation industry accounted for 10% of China’s total energy consumption and 11% of the total carbon dioxide emissions in 2020. The development of new energy vehicles is important to a clean and low-carbon transportation industry and battery technology is a key factor. Batteries directly impact the driving range and even the quality and cost of electric vehicles.
Policy priority
It is specifically mentioned in the "Planning for the Development of the New Energy Automobile Industry (2012-2020)" that breakthroughs should be made in battery technology, establishing an efficient battery recycling system, and speeding up the construction of charging and battery replacement infrastructures. (3)
Gender inequalities and marginalization issues
Most buyers of new energy vehicles are from the first- and second-tier cities in China, accounting for more than 80% of the total. Buyers from the first- and second-tier cities account for 46% and 37%, respectively, and buyers from the third- and fourth-tier cities take up 11%. (4)
Investment opportunities introduction
The IOAs in this sector center around the construction and operation of battery swapping stations and the recycling of traction batteries.
Key bottlenecks introduction
Relevant policies, regulations, and mechanisms need further improvement.
Fuel Cells and Industrial Batteries
Pipeline Opportunity
The construction and operation of battery swapping stations
Battery swapping of electric vehicles: centralized charging stations that include centralized storage, centralized charging, unified distribution of a large number of batteries, and battery swapping at the station. The stations can charge vehicle owners of battery rental and swapping fees. (5) (6)
Business Case
Market Size and Environment
> USD 1 billion
> 25%
It is expected that the number of battery swapping stations will reach 22,000 by 2025, with the market size of station operation being 263.1 billion and the swapping station equipment market size being 69.3 billion. These correspond to the CAGR of 80%-107% for swapping station construction, operation, and equipment from 2021 to 2025. (9)
Indicative Return
10% - 15%
According to GCL Energy Technology Co., Ltd.'s announcement, the internal rate of return (after-tax) of a single passenger car battery swapping station is 10.74% and the overall internal rate of return (after-tax) of a battery swapping station is 13.90%. (7)
Investment Timeframe
Medium Term (5–10 years)
According to GCL Energy Technology Co., Ltd.'s announcement, the payback period (after tax) of a single passenger car battery swapping station is estimated to be 5.14 years, and that of a single heavy truck battery swapping station is estimated to be 4.92 years. (7)
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Because of the long charging time, electric cars aren't as convenient as traditional petrol-powered vehicles. Popularity of electric vehicles are limited by the short service life of batteries and pollution that arises from manufacturing and scrapping process.
Gender & Marginalisation
For now, battery swapping stations are mainly located in economically developed coastal or central cities in China and are rarely seen in the third- and fourth-tier cities and towns. (21)
Expected Development Outcome
Promoting battery swapping stations can help improve the penetration of new energy vehicles, contributing to carbon emission reduction in the transportation industry. The battery-swapping model can also extend the service life of batteries while mitigating environmental pollution.
Gender & Marginalisation
The establishment and development of battery swapping stations in non-Tier one cities can help increase the penetration of new energy vehicles in these regions.
Primary SDGs addressed

13.2.2 Total greenhouse gas emissions per year
China's greenhouse gas emissions is around 15 billion tons of CO2 equivalent in 2020.
China strives to achieve carbon peaking before 2030 and carbon neutrality before 2060.
Secondary SDGs addressed

Directly impacted stakeholders
People
Planet
Indirectly impacted stakeholders
People
Outcome Risks
There exist safety risks of batteries and the risk of personal information leaking, given the IoT model of the battery swapping stations.
Impact Risks
In the absence of regulation, the blind development and repeated construction of battery swapping stations can lead to a waste of resources and potential safety risks.
Impact Classification
What
The development of battery swapping stations can help reduce charging time, promoting new energy vehicles.
Who
New energy vehicle owners can enjoy convenient battery swapping services and save charging time.
Risk
The blind development of battery swapping stations can lead to a waste of resources and potential safety risks.
Impact Thesis
Battery swapping stations can promote new energy vehicles, reduce emission, extend the service life of batteries, and mitigate environmental pollution
Enabling Environment
Policy Environment
The application of the battery-swapping model should be encouraged. The R&D of new charging technologies such as smart orderly charging, high power charging, wireless charging should be strengthened to improve charging convenience and product reliability. (3)
NDRC's policy document promotes battery-swapping model, with the focus being on short-haul, high-frequency, and heavy-duty scenarios, and supports the construction and layout planning of battery swapping stations and shared battery-swapping for rental. (13)
(Policy document): In October 2021, MOIIT announced the decision to launch the pilot projects. 8 cities in the comprehensive application category (Beijing, Nanjing, Wuhan, Sanya, Chongqing, Changchun, Hefei, Jinan). 3 cities in the heavy truck special category (Yibin, Tangshan, Baotou). (22)
Financial Environment
In 2020, MOF issued subsidy policy to support innovations like "vehicle-electric separation". In order to promote battery swapping, these vehicles are not subject to the regulation that "pre-subsidy selling price should be 300,000 yuan or less (including 300,000 yuan)". (16)
In May 2021, NDRC and NEA drafted implementation opinions to promote the establishment of unified standards for battery swapping in major application areas and optimize financial and tax support policies for charging and battery swapping infrastructure. (17)
Regulatory Environment
The State Administration for Market Regulation issued the "Safety requirements of battery swap for electric vehicles" to improve the safety level of electric vehicles using battery-swapping technology in terms of mechanical strength, electrical safety, environmental adaptability. (14)
In April 2019, the "Urban public facilities—Specification for operation management and service of electric vehicle charging/battery swap infrastructure" was published, which specified the requirements for the operation of batter swapping stations. (15)
Marketplace Participants
Private Sector
Important investors include Softbank, Weilai Holding Co., Ltd., Contemporary Amperex Technology Co., Ltd., and internet companies such as Tencent and Huawei.
Government
Local governments have started to provide financial subsidies and policy support for the operation of battery swapping stations, especially in coastal areas, such as Beijing, Shanghai, Chongqing, and Hainan. (18) (19) (20)
Target Locations

China: Zhejiang
China: Inner Mongolia
China: Jiangsu
China: Hebei
China: Henan
References
- (1) State Council, 2021, Action Plan for Carbon Dioxide Peaking Before 2030, http://www.gov.cn/zhengce/content/2021-10/26/content_5644984.htm
- (2) IRENA, 2019, Renewable energy: a gender perspective. https://www.irena.org/publications/2019/Jan/Renewable-Energy-A-Gender-Perspective
- (3) State Council, 2020, Planning for the Development of the New Energy Automobile Industry (2021-2035), http://www.gov.cn/zhengce/content/2020-11/02/content_5556716.htm
- (4) iiMedia Research, 2020, Automotive Industry Data Analysis, https://www.iimedia.cn/c1061/74723.html
- (5) in-en.com, 2021, Battery Swapping Stations: A Prosperous Sector Just Getting Off the Ground, https://chd.in-en.com/html/chd-2411832.shtml,https://chd.in-en.com/html/chd-2411832.shtml
- (6) Electric Vehicle Observer, 2020, Will the Battery Swapping Model be Profitable? https://new.qq.com/omn/20200813/20200813A04VON00.html
- (7) GCL Energy Technology Co., Ltd., 2021, 2021 Plan for the Non-public Offerings of A-shares, http://www.gclet.com/uploads/002015_&e5&8d&8f&e9&91&ab&e8&83&bd&e7&a7&912021-06-15_2021&e5&b9&b4&e5&ba&a6&e9&9d&9e&e5&85&ac&e5&bc&80&e5&8f&91&e8&a1&8cA&e8&82&a1&e8&82&a1&e7&a5&a8&e9&a2&84&e6&a1&88.pdf Baic Bluepark New Energy Technology Co., Ltd., 2020, Plan for the Non-public Offerings, https://pdf.dfcfw.com/pdf/H2_AN202008031396129237_1.pdf
- (8) GCL Energy Technology Co., Ltd., 2021, Third Quarter Report 2021, http://www.gcl-et.com/uploads/2021%20&e5&b9&b4&e7&ac&ac&e4&b8&89&e5&ad&a3&e5&ba&a6&e6&8a&a5&e5&91&8a.PDF
- (9) Oriental Securities, 2021 Battery Swapping Station Operation: The Next 100 Billion Blue Ocean — Report on New Energy Vehicle Battery Swapping Station Industry, https://www.sohu.com/a/488313989_121004207
- (10) GF Securities, 2021, Vehicle-electric separation gets right to the spot in tackling the pain points and driving sales re-growth, http://pdf.dfcfw.com/pdf/H3_AP202008241400922207_1.pdf
- (11) GGII, 2020, Report on the economic analysis of the "vehicle-electric separation" model for new energy vehicles in China, http://www.elecfans.com/d/1304952.html
- (12) Zhejiang Enze Energy Power Technology Co., Ltd., 2022, Charging points have seen explosive growth, and the number of battery swapping stations doubled, https://view.inews.qq.com/a/20220215A06MY900
- (13) National Development and Reform Commissio, 2021, Implementation Opinions on Further Improving the Capabilities to Serve and Support Charging and Battery Swapping Infrastructure (Exposure Draft), https://www.ndrc.gov.cn/hdjl/yjzq/202105/P020210520358612965593.pdf
- (14) State Administration for Market Regulation, 2021, Safety requirements of battery swap for electric vehicles, http://c.gb688.cn/bzgk/gb/showGb?type=online&hcno=7F8FEA35CAE388B191FB39D5A4951B00
- (15) State Administration for Market Regulation, 2021, Urban public facilities—Specification for operation management and service of electric vehicle charging/battery swap infrastructure, http://c.gb688.cn/bzgk/gb/showGb?type=online&hcno=5552B591F466DB401D3425C84D810852
- (16) Ministry of Finance, 2020, Notice of Further Improving the Fiscal Subsidy Policies for the Promotion and Application of New Energy Vehicles, http://www.gov.cn/zhengce/zhengceku/2020-12/31/content_5575906.htm
- (17) National Development and Reform Commission, National Energy Administration, 2021, Implementation Opinions on Further Improving the Capabilities to Serve and Support Charging and Battery Swapping Infrastructure (Exposure Draft), https://www.ndrc.gov.cn/hdjl/yjzq/202105/P020210520358612965593.pdf
- (18) Hainan Provincial Development and Reform Commission, 2021, Guidance on Supporting the Construction of Electric Vehicle Battery Swapping Stations in Hainan Province (Trial), http://kgxj.haikou.gov.cn/quicksilver/public/plugin/detail.htm?id=402849d0740ef050017b2a4df5f9319e
- (19) Chongqing Economic and Information Commission, Chongqing Municipal Finance Bureau, 2021, Subsidy Plan for Electric Vehicle Battery Swapping Station Construction, http://www.12365auto.com/news/20211018/464522.shtml
- (20) Beijing Municipal Finance Bureau, Beijing Municipal Commission of Urban Management, 2021, Interim Measures for the Assessment and Incentives of the Electric Vehicle Public Charging and Batter Swapping Facilities Operations in Beijing, https://weibo.com/ttarticle/p/show?id=2309404688984155750688
- (21) Huaon.com, 2021, 2021-2026 Market Research and Investment Potential Report on Battery Swapping Station Industry in China, https://www.huaon.com/channel/trend/749081.html
- (22) Ministry of Industry and Information Technology, 2021, Notice on the Launch of the Pilot Application of New Energy Vehicle Battery Swapping Model, http://www.gov.cn/xinwen/2021-10/28/content_5647458.htm