A new paper “Battery-as-a-Service: an underexplored opportunity?” makes the case for why switching the UK electric vehicle (EV) model to Battery-as-a-Service (BaaS), could cut upfront costs for consumers by 30% and support the government’s plans to put a stop to the sale of new petrol and diesel cars by the end of the decade.
Produced by energy consultancy Cornwall Insight and law firm Shoosmiths, the paper examines the Battery-as-a-Service (BaaS) model, which is currently being used at scale in China, but continues to lag behind in the UK, despite a shortage of electric vehicle (EV) chargepoints.
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.
The report puts forward several potential benefits of the BaaS model – based on global case studies of the technology in use.
Potential of the Battery-as-a-Service (BaaS) model
- Reducing the upfront cost of an EV by up to 30 per cent and granting greater consumer flexibility through the battery subscription approach.
- Reducing issues around range anxiety, given the ability to swap a depleted battery for a fully charged battery in a matter of minutes.
- Offering a solution for inner city charging where homes do not have access to at-home plug-in charge points.
- Offering flexibility for the electricity network, by allowing unutilised batteries to be discharged onto the electricity network at swap stations during peak hours.
- Offering battery recycling and reuse opportunities, such as using second life swappable batteries in an onsite storage facility at swap stations.
It does also highlight the challenges that are holding the BaaS model back, including 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.
Despite these challenges, the paper analyses how the BaaS model could work in the UK with the right investment, business collaboration and regulatory framework.
Dr Matthew Chadwick, lead research analyst at Cornwall Insight said:
“The UK faces many hurdles in its strive to increase the number of EV’s, with many consumers put off by the high prices and lack of charging infrastructure.
“A switch to the BaaS model, while still at the beginning stages of development, has the potential to encourage EV uptake as costs, rather than being all upfront, are spread more evenly through a subscription service. The system of service stations would also work to cull range anxiety – often cited as a reason not to switch away from petrol and diesel cars.
“Moving to the battery swap model would not be an easy transition and any success would rely on EV manufacturers co-operating in the standardisation of their car batteries, as well as working through a number of other concerns. However, the government’s target to put an end to the sale of all new petrol and diesel cars by 2030 is very ambitious, and it is clear that sticking to a purely charging EV model, with the need to roll out extensive charging infrastructure, will likely lead to the target being missed.
“The BaaS model has the potential to be the out of the box thinking needed to increase EV sales, take the pressure off the infrastructure programme, and help the government deliver on its promise to lower emissions and reach net zero.”
Jonathan Smart, partner and head of mobility at Shoosmiths, commented:
“By 2030, up to 14 million EV’s could be on the road in the UK. A minimum of 300k public chargepoints will be needed to support those vehicles, however, the ratio of EV charge points to plug-in cars is deteriorating – down 31 per cent in 2020 alone. Any shortfall in charging infrastructure could hamper the roll out of EV’s and journey towards net zero.
“The BaaS model is not in opposition to traditional charging infrastructure. Rather, as this report shows, it can complement the existing system by helping meet demand in specific areas, such as city centres where access to plug in charging can be limited.
“The growth of BaaS in the UK is reliant on creating a supportive regulatory environment in which companies across the mobility sector can collaborate. We believe this report can spark the conversation needed to drive change, while encouraging increased research and development into BaaS and the role it could play as part of the UK’s EV infrastructure.”