NIO Power Swap vs. Tesla Supercharging: Ultimate EV Showdown

Supercharging, battery swapping, vehicle-to-grid, electric double layer capacitors. The EV market is full of jargon, which might turn off some people who are still on the fence about EV adoption. How about we fix that? We're going to break down the difference between NIO battery swapping and Tesla supercharging. First I'll give you the short and sweet answer. Then I'll take a deep dive for those of you who want the nitty gritty details about how these services will impact the future growth of each company. If that sounds interesting, keep reading.

Powering an Electric Vehicle

One of the unique selling points of owning an electric vehicle over a gas-powered one is the lower fueling costs. An EV owner can just charge his car overnight at home, or use one of many stations in a charging network while he's on the road.

I mean, who actually enjoys going to the gas station? It's often crowded, noisy and stinks of noxious fumes. But one major pain point that electric vehicle owners still have to deal with is that it takes much longer to refuel an EV than it does a gasoline vehicle. Until recently that is.

While Tesla continues to rapidly expand their supercharger network, their overseas competitor NIO has gone full speed in the other direction. Instead of pouring the majority of their energy into covering all of China with their own charging networks, they chose to rely on a mixture of their own and third-party (such as XPENG) charging stations. And it's not because they couldn't deploy chargers at scale all by themselves. It's because they're going all in on battery swapping.

So EV owners who need more range while they're on the road have two options to choose from now. Which is the cheapest? Which is the easiest to use? Should I only use one or the other?

Let's compare these two vehicle powering services, and when it makes more sense to use one over the other.

FactorsNIO Power SwapTesla Supercharger
Use caseLong distance, e.g. road tripsShort distance, e.g. commute
Cost$142/month for six 70-kWh pack swaps$0.25 per kW
SpeedFast; 3-5 minSlow; 15-60 min
ConvenienceDone-for-youDo-it-yourself
AvailabilityChinaWorldwide
LongevityLimitlessLimited to battery lifespan
Charging automationFullNone

As you can see in the table, each option has its advantages and disadvantages. Now charging is the default option for EVs. And while battery swapping doesn't make sense in every case, it benefits electric vehicle owners in the following ways:

  • It's faster than charging, where the operation has been demonstrated to take anywhere from 1 1/2 to 5 minutes.
  • Similar to charging stations, if there's enough battery swap stations near you, you'll never have to worry about running out of range.
  • You don't have to step out of your car and manually perform the service.
  • Not owning the battery itself means that you transfer all the maintenance and repair costs (one of the major worries in buying any car) over to the battery provider.
  • Tesla cars bought before 2017 got to enjoy supercharging for free, but models sold after that don't get the same perk. And though you also have to pay for battery swaps, you save on home electricity fees.
  • They subsidize the cost of electric vehicles. The battery is one of the most expensive components in an EV. So having a couple of thousand dollars written off the vehicle price could spell the difference between buying your first electric vehicle, or yet another gasoline-powered vehicle.
  • Battery swap stations make even more sense in crowded cities (Shenzhen, Shanghai, Beijing etc) since they take less space than parking lots filled with 30-60 superchargers.

So now that you've gotten a quick overview of these two vehicle powering methods, we'll dive even deeper into how their features differ, the use cases for each, and which will be the dominant method for powering EVs.

To start things off, let's go back in time and understand what prompted the need for battery swapping to be developed in the first place.

How to Cure Range Anxiety

Let's define range anxiety.

According to the Oxford Dictionary, range anxiety is “worry on the part of a person driving an electric car that the battery will run out of power before the destination is reached”. It also mentions that range anxiety is the biggest hurdle to achieving mass market adoption of all-electric vehicles. 

No one wants to fork over $20,000-$100,000 for an electric vehicle only to accidentally end up stranded in a remote location with no nearby charging stations.

So 3 main strategies have been developed in response to this commercial bottleneck. First and most obvious, the ongoing development of higher capacity batteries. Second, EV companies and their local governments have been  building electric charging stations nationwide. And finally, battery swapping as an alternative to charging altogether.

What is Battery Swapping?

Battery swapping is the removal of an electric vehicle's discharged battery and replacing it with a fully charged one. This eliminates the standard issue of having to wait for your vehicle's battery to finish charging.

Each battery swap station has differing degrees of automation, but the service itself consists of the following 3 steps:

  1. Drive the car onto a platform with a removable floor.
  2. Unscrew and remove the car's battery.
  3. Place the new battery inside and screw it in place.

Sounds simple enough. “And we took this long to fully develop it?” Well… not exactly.

The World's First Battery Swap Station

Battery swapping is not a new invention. On the contrary, this technique has existed for over a 100 years. It just wasn't feasible for anything but large electric vehicles like forklifts, tractors and buses up to the early 2000s. Better Place was the first company to open a commercial battery swap station in 2011, which operated in Israel and Denmark. Unfortunately, their entire business model relied on the French car company Renault's Renault Fluence Z.E., the only electric car back then that could switch batteries. 

Needless to say, Better Place went bankrupt, blowing just shy of a billion dollars single-handedly trying to develop charging and swapping infrastructure. But to raise that much venture capital, Better Place had to at least have a compelling business model right?

The Business of Battery Swapping

As groundbreaking as battery swapping is, the underlying concept is much more similar to gas refueling than battery charging is.

With battery charging you are given an energy supply with a limited lifespan, typically an 8 year warranty. Now imagine a world where a brand new vehicle's price tag also factored in the cost of 8 year's worth of gasoline. Sounds crazy right? That would increase the barrier to owning a vehicle by thousands of dollars. Well, the same thing counts for electric vehicles.
Battery swapping allows electric vehicle owners to pay for more range whenever they don't have much left (or need more than usual for their trip). This business model is a shining example of having your cake and eating it too. It's no wonder Tesla tried their hand at it, even though it's debated among the EV community whether Tesla gave it a fair shot at all.

Just 2 short years after Better Place's bankruptcy, Tesla announced a battery swap station of their own and designed the Model S with fast battery swapping in mind. A side benefit of this design is that it allowed vehicles to be assembled faster. But as you'll read later, Tesla made one last-minute design decision that doomed their battery swapping service from the start. So why did Tesla end up abandoning this initiative?

Is Tesla Battery Swapping Dead or Delayed?

In 2013 Tesla announced that they were going to support battery pack swaps at their charging stations, and held a demonstration that showed a Model S battery getting swapped in about 90 seconds. That's around half the time it takes to refill an empty gasoline fuel tank.

Tesla deployed their first swap station off Interstate 5 in California, targeting Model S owners who regularly made the drive from San Francisco to Los Angeles. The service was priced at the same cost as 15 US gallons in June 2013 prices, which is in the neighborhood of $60-$80.

Tesla's battery swapping operation never lived up to its full potential though, mainly due to two reasons.

  • The battery swap time wasn't as fast as promised, due to a last-minute decision to add a new titanium shield on the bottom of the Model S. This increased their swap time from 90 seconds to over triple that. On top of that, the service wasn't fully automated, requiring humans to do the bulk of the work.
  • Tesla also didn't disclose the full truth of how their battery swapping model works. Many of their pilot program users were surprised to hear that the new battery they got had to be returned on their way back home. It could be argued that this defeats the whole purpose of battery swapping.

These blunders have even led some to speculate that Tesla only offered battery swapping as a scheme to earn nearly $300 million in Zero Emission Vehicle credits.

This is what Elon Musk had to say about Tesla's battery swap pilot program at a 2015 shareholder meeting:

We have, basically, the LA-to-San Francisco pack swap capability in place, and I believe all Model S owners in the California area have been invited at this point to try it out. And what we're seeing is a very low take rate for the pack swap station. So we did an initial round of invitations, where we did basically, like, 200 invitations, and I think there were a total of four or five people that wanted to do that, and they all did it just once. So, like, okay, clearly it's not very popular. And then we said, okay, let's expand that invitation to all customers, but I would expect that all customers behave roughly like that initial sample group.

We built the pack swap into the car because we weren't sure if people would want to choose the pack swap or not. We thought people would prefer Supercharging, but we weren't sure, so that's why we built the pack swap capability in. And, you know, based on what we're seeing here, it's unlikely to be something that's worth expanding in the future, unless something changes.

Elon Musk CEO of Tesla at 2015 shareholder meeting

So there you have it, straight from the horse's mouth. Tesla is no longer interested in supporting battery swaps, unless something changes in the competitive landscape.

Tesla, meet NIO Power Swap.

NIO Power Swap

NIO Power Swap has realized the true potential of battery swapping, claiming to have completed nearly a million battery swaps. So not only did they find a way to scale this technology, they created a whole new business model around it: the Battery as a Service (BaaS) subscription model.

In August 2020, NIO launched a battery subscription service that slashed $10,000 off their electric vehicle cost. All this and a 70 kWh battery pack for $149 a month. That's a good bargain considering the premium market they operate it. Unlike Tesla, who required their users to return the newly swapped batteries on their way back home, NIO lets you keep the new battery until you decide to exchange it for yet a newer one.

Leading the way in establishing China’s electric vehicle battery swapping standard, NIO is making it easier for other car companies to develop their own battery swapping services in future. NIO has already deployed battery swap stations along China's G4 expressway and has scaled that up to over 150 stations so far, though their previous goal was 1,000 stations by 2020.

Final Verdict: Battery Swapping vs Battery Charging

It seems that battery swapping offers more advantages than charging, but only when it's executed right. That means largely automated, and available nationwide. If other EV companies can follow suit, we suspect that battery swapping will win in the long term.

That being said, there are pros and cons to each vehicle powering method, so here are some simple criteria to help you decide which one you which one is your best option.

It's better to use battery charging when:

  • You either live in or are driving to a location with a high density of Tesla supercharging stations.
  • You have time to kill, for example during your lunch break. Depending on how many EV owners are in your area, you might have to wait for a charger to free up.
  • Battery swap stations are not within driving distance, or even available in your country.

On the other hand, it's better to use battery swapping when:

  • It's available in your country (which is only China at the moment).
  • You want to be on the cutting edge of EV technology.
  • You want to try out a higher capacity battery, since NIO makes it possible to rent them.
  • You’re in a big hurry to reach your far away destination.

So that about does it for this article. Hopefully you learned something new about powering electric vehicles. Which EV powering method do you think will dominate the market and why? Let me know in the comments below.

Also check out this article on how Tesla & Nio compare with the competition.

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