How to seize the next billion dollar blue ocean when multiple enterprises enter the market for two wheeler battery swapping?
On April 15, 2024, the new national standard for two wheeled electric vehicles officially came into effect. The national standard stipulates that the speed of two wheeled electric vehicles should not exceed 25 kilometers per hour, the total weight of the vehicle should not exceed 55 kilograms, and the battery voltage should not exceed 48V, which has further standardized and regulated the industry. According to data released by the China Bicycle Association, in 2022, electric bicycle companies will achieve a profit of over 10 billion yuan, a year-on-year increase of over 20%; The annual production of two wheeled electric vehicles reached 40 million units, a year-on-year increase of 14.8%. The White Paper on the Intelligent Development of Chinese Bicycles and Electric Bicycles (2022 Edition) and the Research Report on the 2022 Two Wheel Green Travel Index summarize that China's bicycle and electric bicycle industry has achieved steady progress, thanks to the industry's trend towards high-end, intelligent, and green development in recent years. The industry has shown characteristics such as accelerating information technology applications, steadily advancing intelligent production upgrades, increasingly evident platform management trends, and gradual requirements for intelligent products. Continuous intelligent upgrading has become an inevitable path for the development of two wheel electric vehicles.
The strict requirements of the new national standard policy, the large scale of electric vehicles, and the trend towards intelligence have jointly promoted the development of the two wheeled electric vehicle battery swapping industry. In addition, the urgent need for battery swapping among 13 million food delivery riders and delivery drivers has further fueled the rapid development of the industry, with brands such as Iron Tower Battery Swap rising rapidly. According to research firm EVTank, with the increase in penetration rate of battery swapping services and the growth of battery swapping user groups, the size of China's two wheeler battery swapping market is expected to exceed 100 billion yuan by 2025, becoming a new "blue ocean".
Is the billion dollar blue ocean of two wheeler battery swapping real?
The essence of the battery swapping mode is to explore the full lifecycle value of power batteries and achieve the redistribution of interests between enterprises and consumers. From the perspective of consumers, the battery swapping mode can help them save on purchase and usage costs, improve energy replenishment efficiency, especially for delivery riders who can significantly improve work efficiency and safety, making them the most important user group for battery swapping. From the perspective of enterprises, two wheeled electric vehicle manufacturers can combine battery swapping models to launch various sales plans, promote sales, facilitate battery monitoring, and reduce recall issues caused by battery failures. Battery and battery swapping cabinet equipment suppliers can gain greater growth space and more profit margins. Within the same lifecycle of the battery, the battery swapping mode can enable different enterprises and end users in the industry chain to profit simultaneously. In the long run, the battery swapping mode can also reduce the risk of uneven load on the power grid, achieve peak shaving and valley filling, and promote the achievement of carbon peak and carbon neutrality goals. Against the backdrop of multiple favorable factors for users, enterprises, and policies, the two wheeler battery swapping model is bound to develop rapidly, and the billion dollar blue ocean is not just talk.
How to seize the blue ocean of billions of
battery swapping
At present, there are many enterprises entering the domestic two wheeler battery swapping industry, and the upstream, midstream, and downstream of the industry are showing a "vertical and horizontal" pattern:
Vehicle companies represented by Yadea, Xinri, etc; Battery manufacturers represented by Tianneng and Nandu; State owned enterprises represented by China Tower; Third party service providers represented by Hello and Smart Rental; And self operated enterprises.
The upstream link is composed of battery suppliers and vehicle manufacturers, each responsible for providing equipment manufacturing such as batteries and electric vehicles. The midstream is mainly for the construction and operation of battery swapping stations, which require a large amount of funds and have strong requirements for battery investment, network site selection, wiring renovation, and operation management; Internet enterprises such as operators promote and serve users to achieve revenue through cooperation with battery and power exchange cabinet manufacturers. The downstream mainly consists of consumers in the two wheeled vehicle battery swapping mode. At present, China's battery swapping model is still in the early stage of industry development, and most battery swapping operators mainly develop ToB business, mainly targeting 13 million delivery riders, express delivery and other users who urgently need battery swapping.
Clear differentiation of the battery swapping industry chain, how can capital grasp this future billion dollar blue ocean? There are three major elements to consider:
1. Cost control.
The battery swapping mode requires a high cost investment. In terms of the construction of battery swapping points, an average of about 20 batteries are required for a swapping point. Based on a battery cost of 3000 yuan, the cost of a single battery swapping point is 90000 yuan. In addition, the cost of a swapping cabinet is 9000 yuan, as well as labor, installation, electricity, and other expenses. The construction cost of a swapping point is around 100000 yuan.
2. Quality control.
At present, the battery swapping platform is based on IoT technology and big data, and multiple brands claim to be able to achieve real-time tracking, protection, and safety warning for each battery. The battery swapping cabinet also achieves centralized, platform based, and digital safety energy management through comprehensive cloud networking. In the context of ensuring safety, many brands frequently encounter negative public opinion such as replacing faulty batteries and power outages halfway. The root cause is still the insufficient quality control of batteries, especially in the current lack of unified policies and regulations. Many brands have problems such as inadequate operation and maintenance, and untimely replacement of old batteries, which have led to quality issues. There are also individual speculative merchants who use refurbished battery cells, dismantled battery cells, and other substandard products, causing frequent battery failures and affecting the reputation of the battery swapping industry.
3. Range control
The battery life is the biggest pain point for users, and the battery life also determines the user's reputation and choice tendency. Building a good user reputation is more conducive to brand development and profitability. How to control the blue ocean of two wheeled vehicle battery swapping, battery life is the most important factor. At present, many users of battery swapping brands have reported that the nominal range of the battery does not match the actual range. In fact, based on factors such as charging efficiency of battery swapping stations, swapping frequency, battery life, and temperature influence, it is relatively normal for the actual battery life to reach more than 70% of the nominal range. Based on certain user research feedback, the battery life of most brands is within normal range.
Swapping two wheelers undoubtedly has positive significance for urban energy and traffic safety management, standing on the three major "trends" of policy orientation, corporate profitability, and user demand. We are about to enter a new era of rapid development, and by grasping the three major elements of cost, quality, and battery life, we can expect a billion dollar blue ocean in the future.
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