NIE 2023 | ZEQING New Energy Ben Bo: Smart Battery Swap · 'Swapping' for the Future

Against the backdrop of 'dual carbon', the penetration rate of new energy vehicles and battery swapping models is increasing, and the automotive aftermarket is also continuously developing. Currently, the charging market, which receives more attention, has encountered some development bottlenecks, such as long queuing times, safety issues, range anxiety, especially during holidays when charging is more problematic. Battery swapping has natural advantages in some aspects, and Benbo has summarized six major advantages:

1) Reduce car purchase costs:Battery swapping mainly aims at decoupling the vehicle's electrical system from the engine, targeting mainly commercial passenger vehicles, taxis, ride-hailing services, etc. After decoupling, only the bare vehicle needs to be purchased, while the battery can be rented. Currently, batteries account for a significant proportion of the total cost of a vehicle, nearly 40%. Battery swapping can effectively lower the initial purchase threshold for commercial vehicle owners.

2) High convenience:The energy replenishment efficiency of battery swapping is high, with the entire swapping process taking only 3 to 4 minutes, which is close to the time it takes to refuel. Although charging speeds are constantly accelerating, the efficiency of fast charging and ultra-fast charging for energy replenishment is significantly weaker than that of battery swapping.

3) Battery asset maintenance:After the separation of vehicle and battery, the battery can be operated and maintained by a professional third party. The safety and lifespan of battery assets will be improved; each battery swap will undergo a professional health check, while ensuring charging in an environment with constant temperature and humidity.

4) Reduce electricity costs:Battery swapping can take advantage of the growing price difference between peak and off-peak electricity prices, and through energy storage, further reduce the overall cost of electricity consumption.

5) Reduce power consumption:Due to the short, flat, and fast battery swapping and discharging characteristics, it does not require carrying a large and heavy battery, which can reduce unnecessary power consumption and provides a significant advantage.

6) Unified management to reduce investment:Most urban areas in China contain many old residential communities, and their network capacity cannot support the rapid charging needs of a large number of electric vehicles. Battery swapping can be managed uniformly through time and space, reducing the demand for urban power grid facilities and also lowering the overall government investment in the power grid on a large scale.

Ben Bo introduced that ZEQ New Energy's headquarters are located in Hefei and were established in 2018. From 2016 to 2017, they began researching and developing technologies related to the battery swapping field. The iteration of ZEQ's business cognition has also transitioned from the 1.0 product era to the 4.0 platform era, reflecting ZEQ's sixteen-character business model—'Vehicle-Electric Separation, Battery Rental, Platform Services, Data Empowerment'.

• 1.0 Product Era

Zeqing mainly develops related technologies from specific product aspects, realizing the joint development of battery swapping models from intelligent equipment to the complete vehicle end. At the same time, it focuses on developing core interior parts and assemblies related to manufacturing and battery swapping. In the 1.0 era, Zeqing started joint research and development with different vehicle manufacturers based on their respective standards from the perspective of a battery swapping operator. From an operational standpoint, it manages the entire station battery packs remotely in real time from a digital management perspective to improve their usage and operational efficiency.

• 2.0 Industry Era

From the sales of battery swapping models to the leasing of batteries in vehicle electrification, as well as practices and developments in battery asset management throughout the lifecycle, after-sales service, separate financing for batteries and vehicles, and SaaS platforms, we aim to achieve real-time understanding of these assets, improve operational management efficiency, and implement cascading utilization of batteries. We possess a complete industrial chain development path.

• 3.0 Ecological Era

As a battery swapping operator, it is necessary to engage in operational leasing and financial leasing services with vehicle manufacturers and related battery companies, credit companies, battery banks, and financial institutions. By taking into account the different battery swapping situations in each region, it is essential to make better use of support policies to build an entire battery swapping ecosystem.

• 4.0 Platform Era

The volume of industry data has increased significantly, covering operational data of batteries, site usage, vehicle data, and more. To empower the entire industry with big data and attract more industrial players, including financial institutions, to invest in the industry, it is necessary to have a light-asset operation similar to that of the entire hospitality industry. Both investors and participants can act as owners. ZEQ or other battery swapping operators have played a good role in acting as sub-operators, further expanding the scale of the entire industry.

Currently, the operational data of ZEQ's battery swapping project shows a positive trend, which is sufficient to prove the huge market demand for the business model. In addition to market promotion, Ben Bo believes that technological iteration is also one of the key factors supporting the success of battery swapping projects.

In terms of intelligent battery swapping equipment, ZEQ has gradually upgraded to the fourth generation of battery swapping stations, making improvements in various dimensions such as the battery swapping process, efficiency, service, and supervision. In terms of innovative AIS devices installed within battery swapping stations, ZEQ has developed non-contact battery swapping self-service machines, open-entry and exit rotating platforms, cloud monitoring, adaptive RGVs, and in-warehouse thermal imaging, among many other devices. As for the HuiChuan Battery Swap SaaS platform, which serves as the backend of the battery swapping station, ZEQ integrates functions such as BI big data, GIS comprehensive monitoring, battery traceability, and remote cloud control.

In addition, Zeqing is actively collaborating with different automakers to develop various battery swapping models including passenger cars and commercial vehicles. It is working with upstream and downstream industry players such as B-side and C-side users, financial service institutions, battery asset management companies, and power generation enterprises to build a battery swapping ecosystem.

For the future of battery swapping projects, ZTE has established a strategic quadruple play of 'NaaS + BaaS + SaaS + AaaS'. In the future, it will derive revenue from four categories of services: the scaling of battery swapping networks, battery value management, platform data empowerment, and the battery swapping service ecosystem.

With the continuous expansion of ZEQ's battery swapping business scale and the gradual improvement of the battery swapping service ecosystem, ZEQ launched an organizational restructuring in 2023, following the four-step strategy. The business was divided into battery asset management companies, intelligent equipment companies, operation companies, and marketing companies to further enhance operational flexibility, specialization, and the group's ecological service and market competitiveness as a whole. The group has placed the battery asset management business ecosystem at the top priority, creating a business value closed loop covering the entire lifecycle of power batteries through customized development, operation, cascading utilization, recycling and dismantling, and financial services.

Ben Bo stated that in the future, with the scaling of operations and the improvement of the business ecosystem, the penetration rate of battery swapping business models in the market will become increasingly high. The group will embrace a broad market with a scale of tens of billions over the next five years.