You buy one NIO you can choose between owning or renting batteries. Currently, this is the only car manufacturer that offers battery rental. Renault ended the scheme in 2021. Leie never took off very well in Norway.
Should be able to change batteries
Renault Zoe and Kangoo ZE were electric car pioneers. When Zoe appeared in 2012, there was not much experience with how long the batteries would last. Evil tongues said that when the batteries were exhausted, the only thing to do was scrap the car. Renault offered battery rental to assure customers that they would never have to worry about just that. Another point was to be able to offer upgraded batteries with better range - when the time came. But when Renault came out with a 41 kwh battery it was not practically possible for owners of cars with a 22 kwh battery to switch. Thus, one of the advantages of renting batteries fell away.
NIO changes the battery in 5 minutes
Changing the battery on an electric car normally takes a full working day - maybe more. When the Møller chain had to change the battery boxes on its hybrid cars, the cars had to be in the workshop for 3-4 days. Tesla considered for a while making arrangements for exchangeable batteries but decided against it. Chinese D were probably the first to offer replaceable batteries in their model Aeolus E70 when it came as a 2017 model. NIO is, in comparison, a completely new car brand. They change batteries in 5 minutes from their own "battery swap" stations - the first recently set up at Kjellstad on Lier outside Drammen. NIO owners can drive by to have their discharged battery replaced with a fully charged one.
Battery as a service
Battery replacement is reserved for NIO owners who leier batteries. It is a kind of subscription - Baas (Battery as a Service). The concept not only ensures that you save time on charging, but you always get a good battery - even when the car is 10 years old.
Do you need to change the battery?
Renault justified its termination of battery rental by saying that it was not necessary. There were practically no cars that needed a new battery. Tesla is experiencing the same thing – rightly so after a period of production errors. In any case, the batteries will gradually lose capacity after many charges, but that can be accepted with a car that is starting to age. Although there is currently no exact answer, since few modern electric cars have managed to be over 10 years old.
The problem with the oldest electric cars today is not that the batteries have run out of capacity, but that the original batteries had too little capacity. Early models such as the BMW i3, Mercedes B Electric, Nissan Leaf and Volkswagen e-Golf with a range of around 160 km do not keep up with today's electric cars. However, the cars could have been given a new lease of life if it were possible to upgrade the batteries with more powerful battery packs.
Always the latest battery technology
The NIO ES8 can either be delivered with a 75 kwh battery or a 100 kwh battery. By renting batteries, you can change your subscription during the life of the car. If you don't need 100 kwh, you can downgrade to 75 for lower rent. The biggest advantage of NIO's scheme is that you can upgrade to newer battery technology. In quarter 4 (2022) NIO has said that they will come with a solid state battery of 150 kwh. Dongfeng E70 was launched with solid state batteries earlier this year, so there is every reason to have faith in NIO's plans. What is impressive is that cars with "old" battery packs should be able to upgrade to solid state - for now, a promise made for the sedan version ET7.
Profitability
If we look at it soberly, few electric cars will need to change the battery pack more than once during a lifetime of 15-20 years - most will get by with none. We take NIO ES8 Signature as an example, the following prices are available:
Car only: 609
Rental of battery 75 kwh: 1399 per month
Rental of battery 100 kwh: 1999 per month
Buy battery 75 kwh: 90
Buy battery 100 kwh: 160
Work to replace battery: 0
Keep the car for 5 years
Car with 100 kwh battery:
Purchase price without battery: NOK 609
– with battery: NOK 769
Assuming a car purchase financed with 35% cash and a 5-year loan with a loan interest rate of 2,95% pa
Monthly cost upon purchase: NOK 9
Monthly rental expense: NOK 9 (car: NOK 232 + battery: NOK 7)
-75 kwh battery:
Purchase price without battery: NOK 609
– with battery: NOK 699.
Assuming a car purchase financed with 35% cash and a 5-year loan with a loan interest rate of 2,95% pa
Monthly cost upon purchase: NOK 8
Monthly rental expense: NOK 8 (car: NOK 632 + battery: NOK 7)
The monthly sums are about the same. Profitability here is determined by what the sale/trade-in price will end up at. How will secondary market buyers value the battery rental scheme?
Save instead of rent
After 5 years, the car will be paid off. Given that whoever chose to purchase the batteries, continue to spare corresponding rental amount to accommodate a battery change when the car is 15 years old. The savings will yield the following sums - given that the savings rate is 0,35% pa:
Savings for a 100 kwh battery:
10 years of savings with monthly payments of NOK 2 (equivalent to rent for a 000 kwh battery) will yield NOK 100. A 244 kwh battery costs NOK 278 today, but will probably cost quite a bit more in 100 years.
Savings for a 75 kwh battery:
10 years of savings with monthly payments of NOK 1 (equivalent to rent for a 400 kwh battery) will yield NOK 75. A 170 kwh battery currently costs NOK 994, but is expected to cost more in 75 years.
Noted in the margin
NIO's battery rental under the "BaaS" scheme consists of 2 free battery changes per month with 200 kwh of free electricity. Until recently, the first customers of the NIO ES8 received a pioneering package which included, among other things, 6 free battery changes per month. This has stimulated many to choose to rent rather than own.
The battery changes in the example are based on the fact that NIO can change the battery without an expensive workshop visit. For all other electric cars on the market, a battery change will take at least one day at a workshop - which we estimate at NOK 20 or more. This is in addition to the battery prices.
Even if you save for a possible battery replacement, many will find it unprofitable to carry out a battery replacement on a car that is, for example, 15 years old. The car will then very likely be worth less than the cost of switching. In this way, the owner can count the residual value of the car as lost. Seen from a life cycle perspective, this is a cost to take with you in favor of renting batteries.
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