With the government’s widely publicised plan to end the sale of new petrol and diesel cars in the UK by the end of the decade comes a secondary issue – the need for an extensive electric vehicle (EV) charging infrastructure to support an exponential increase in the number of EV cars on the road.
Rollout of EV chargepoints is significantly behind what is needed to meet the predicted demand from 2030. It is estimated that the number of chargepoints will need to increase tenfold by 2030 to cater for the anticipated numbers of EV drivers. There is also currently an uneven geographical distribution of EV charging points across the UK.
The government’s UK Electric Vehicle Infrastructure Strategy is a step in the right direction regards addressing the extra demand for charging points in the UK, but there is no simple ‘one size fits all’ solution. In urban city centres where dwellings largely comprise flats with no off-street parking, there will be high demand for ultrafast chargepoints, whereas in rural areas, slower, but more economical, home chargepoints will prevail. There will also be peaks and troughs in demand at certain times of the day.
This all begs the question: should we be looking at what other countries are doing in the EV charging space and considering alternative solutions to compliment the planned EV charging infrastructure? And could Battery-as-a-Service (BaaS) be one such solution?
What is BaaS?
The BaaS model enables EV owners to swap out depleted batteries for fully charged ones at a service station via a subscription service. These batteries can still be charged using normal chargepoints, with BaaS complimenting the EV infrastructure that has already been installed.
Although it is at an embryonic stage of development and not without its own challenges, early signs are that BaaS is working successfully in China with the principal market incumbent, Nio, now looking to roll it out in Europe as well.
There are several potential benefits of the BaaS model – based on global case studies of the technology in use.
“BaaS offers a solution for inner city charging where homes do not have access to at-home plug-in charge points.”
Benefits of the BaaS model
- Reduced issues around range anxiety, given the ability to swap a depleted battery for a fully charged battery in a matter of minutes
- The upfront cost of an EV is reduced by up to 30 per cent and the subscription approach provides greater consumer flexibility
- It offers a solution for inner city charging where homes do not have access to at-home plug-in charge points
- It provides flexibility for the electricity network, by allowing unutilised batteries to be discharged onto the electricity network at swap stations during peak hours
- It creates a potential solution for a global shortage in the raw materials necessary for battery manufacture including battery recycling and reuse opportunities. This could include second life swappable batteries in an onsite storage facility at swap stations
Challenges of the BaaS model
As with any new or alternative technology, the BaaS model also has its challenges, the principal one being a lack of battery standardisation across vehicle manufacturers – meaning swap stations are not currently scalable, with each station only able to service a specific make or model of car.
Other hurdles include shortages of the raw materials needed to manufacture batteries and uncertainty over battery ownership, especially when the EV is re-sold. Major investment is also needed to develop and service the technology and infrastructure the model requires.
Worth exploring
To be successful, BaaS would need government support to help provide research and development investment, a supporting regulatory framework and encourage collaboration between the relevant industry stakeholders. But given the current state of play regarding EV chargepoints, BaaS merits further consideration rather than just being ruled out for being in its infancy and relying on the rapid development of battery technology to reduce range anxiety and accelerate charge time.
Even if BaaS is not considered a viable option in the UK for domestic EVs, it could be still considered a complementary part of a wider EV infrastructure solution – perhaps providing a charging solution for EV fleet cars such as a taxi company or for the rental market. Surely something worth exploring?
You can download Shoosmiths’ full report on ‘Battery-as-a-Service: an underexplored opportunity?’ produced in partnership with Cornwall Insight here.
“Early signs are that BaaS is working successfully in China"
Disclaimer
This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.