(We originally posted this in 2021. You can read more of our original ideas in our archive.)
Problem: Charging electric vehicles takes time, thus drivers and consumers must plan in advance.
Solution: This business would create electric vehicle battery-replacement stations that are just as ubiquitous and common as gas stations. Thus, when your vehicle is running out of battery you would not need to stop and recharge it; instead, you would only need to swap it. I had this idea while on a hike in Tennessee with Todd Baldwin, a friend of mine and startup founder.
The process at these replacement station would be simple: customers would drive up with their car to a car-wash-type building and pay a small fee ($1? or a subscription?) to have their dying battery swapped with a fully charged battery in 5 minutes or less. Given the rise of electric vehicles, these replacement stations would probably be just as frequent as regular gas stations. Once the customer has swapped their battery, they leave the station and keep the new battery! In the meantime the station will keep, and charge, these batteries for future swaps.
While not as sexy as Tesla, electric vehicle batteries are the enablers of the next generation of transportation. In fact, MarketWatch estimates that “In only China itself there are more than a hundred electric vehicle battery manufacturers and the market value is estimated to reach a value of close to 240 billion dollars in the next two decades, while by 2020 it is estimated to be about 37 billion dollars. These batteries are usually secondary batteries and are made to provide power over sustained periods of time.” When compared to the market size of Electric Vehicles in general, batteries are typically about 25% of the market size and will continue to be the backbone of the industry. As I see it, EV batteries are to cars as silicon (from providers like Intel, AMD, and more) is to computers.
The electric vehicle battery market can be split up into four types of batteries (as I’ve deduced from MarketWatch and Stanford):
Lead- Acid: These are the most inexpensive and are commonly available and are traditionally preferred owing to their lower cost, higher availability and evolved technology.
Nickel Metal Hydride: Their technology has also evolved over time but are preferred less over lead-acid batteries owing to their relatively lesser efficiency when it comes to charging and discharging.
Zebra: These batteries are somewhat less used due to their poorer power density which reduces the charge storage time.
Lithium ion: These are used most frequently in modern day electric cars.
Since this business would be installing a variety of different batteries, they would probably have many of these types. Perhaps, the more unique the car and batter the more expensive the swap.
One company which has already begun acting on this “Batteries as a service” model is NIO Inc, which in the last 12 months has had an almost 1,000% gain. In a livestreamed media session in August, NIO Vice President of Power Management Shen Fei officially launched NIO’s new Battery-as-a-Service strategy:
The new service decouples the battery from the purchase price of the vehicle, providing a lower up front purchase price, more flexibility to the owner in the future, the ability to swap batteries on long trips, and additional business opportunities for NIO.
The battery is the single most expensive component in an electric vehicle, so removing the battery from the initial purchase event makes electric vehicles more affordable for new owners. The new business is made possible by the removable battery that is fundamental to the design of all NIO vehicles and makes the batteries in NIO vehicles chargeable, swappable, and upgradeable.
I predict that whole businesses and industries will thrive off this swapping technology and process.
Monetization: Subscriptions or sales from customers who use the stations.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)