The battery swapping market is projected to grow from USD 1.7 billion in 2022 to USD 11.8 billion by 2027, at a CAGR of 46.9% during the forecast period. Increased demand for efficient, long-range, and low-emission vehicles is expected to boost the battery swapping market. Countries around the world are undertaking efforts to reduce emissions from vehicles in the coming decades. Compared to battery charging, battery swapping offers a quick battery exchange option. Government policies in countries like India for battery swapping are expected to drive the market in the future. Similar incentives by different countries are expected to increase the demand for electric vehicles, specially E2Ws and E3Ws equipped with swappable batteries. Battery swapping increases the vehicle’s operational life while maintaining the majority of its value as a used vehicle.
Market Dynamics:
Driver: Increasing reliance on micromobility
The use of EVs in micromobility is becoming popular, with many nations supporting micromobility companies by providing infrastructure, allocating specific areas in cities for service trials, and working with these companies to establish micromobility in the country. The durability and safety of shared e-scooters have improved over the last several years. But there is still one issue that stands out: the issue of recharging. While the electric vehicle industry struggles with issues related to range, recharge times, and infrastructure, micromobility may have it much easier.
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Opportunity: OEMs plans on selling EVs without batteries will increase demand for batteries as a service
Battery-as-a-service (BaaS) enables users to lease batteries apart from the vehicle, eliminating the need for an upfront battery along with the vehicle’s purchase. The battery would be leased from a provider of charging infrastructure under the BaaS model, and every time the battery requires recharging, it would be swapped out at a station.
From the standpoint of the consumer, BaaS is an asset-light, low-cost, and quick-on-its-feet approach that enables the customer to swap the battery quickly, as compared to a fixed charging station where the charging of the batteries takes time and requires an expensive charging infrastructure. Due to the BaaS model, the upfront costs of EVs may fall significantly; for example, the expenses for two-wheelers may easily decrease by up to 20%. The model reduces the price of establishing a retail charging station and related infrastructure. BaaS providers can also grow their networks by working with organizations that have extensive networks of agents and charging infrastructure, similar to how banks use business correspondents to expand their banking services to the unbanked and underbanked areas.
The Europe market is projected to to grow at faster rate during the forecast year
Europe was one of the fastest-growing regions in the battery swapping market, NIO Power, a leading manufacturer of electric vehicles in China, recently announced plans to grow operations and introduce its line of electric vehicles to Europe, including the UK. NIO co-founder Lihong Qin revealed that the company will introduce its ET5, ET7, and EL8 electric vehicles in the UK toward the end of next year after doing so in Germany, the Netherlands, Denmark, and Sweden.EU initiatives for greener transportation and high funding achieved by local players like Swobbee and others are also expected to drive the market in this region.
Key Market Players
The battery swapping market is dominated by players such as NIO Power (China), Gogoro (Taiwan), Immotor (China), Aulton (China), and Sun Mobility (India). These companies adopted new product launches, partnership, and supply contracts to gain traction in the market.
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