Elon Musk and Shai Agassi, two of the tech world’s most charismatic visionaries, could not make it work. Now another entrepreneur is trying to crack the battery-swap conundrum and bring electric transport to the masses.
Horace Luke has come up with what he sees as the future: electric scooters powered by batteries that, when depleted, can be swapped for fully charged replacements at a local convenience store.
“I’m a guy that changes the playing field,” says Luke. The 45-year-old is the co-founder of Gogoro (pronounced go-go-ro), and his career includes senior stints with Nike, Microsoft and HTC.
Electric vehicles have made great strides in recent years, with Musk’s company, Tesla Motors, pushing the limits of both range and performance. The Model S can do up to 330 miles (530km) on a single charge and 0-60 mph in 2.8 seconds and “superchargers” can double the charge of a battery in 20 minutes.
The likes of Audi, Porsche and Aston Martin are pressing into Tesla territory, with fast-charging, high-performance and zero-emission vehicles of their own.
But these companies, says Luke, are serving the 1 per cent. He is after the upper 50 per cent and especially the global middle-class in emerging markets. And that means offering $2,000 (Dh7,346), zero-emission “smartscooters” that come with mobile phone-style plans.
Being part of that global middle-class is not about eating “monkfish and chicken for lunch”, says Luke. Instead, it is about urbanisation and transport. “The global middle-class is going to live in the city. Your best friend is living across the city,” he says. “That has a huge demand on energy and transportation. That is going to happen in the next 15 years.”
Consumers buy Gogoro’s electric bikes and sign up to a monthly mileage-based tariff to rent batteries — the same automotive-grade cells supplied by Panasonic and used by Tesla. The scooters are powered by two 1.3 kWh batteries the size of rugby balls that can provide a run of up to 62 miles. Batteries can be swapped at “GoStations”, self-service points along the journey that are no bigger than vending machines.
The company has more than 3,000 bikes in Taiwan, its home market and where scooters are very popular. It has 125 GoStations in greater Taipei and Taoyuan.
Now Gogoro is coming to Europe. A trial starts in Amsterdam before it is introduced across the continent.
With its basic operating principle — that the batteries should be interchangeable — Gogoro is pursuing a business model that pushed Better Place, a start-up, into bankruptcy just two years ago.
That company was set up by Agassi and backed by almost $1 billion from investors including Idan Ofer, the shipping scion. The idea was that, rather than waiting hours for the cars to recharge, customers could simply swap their depleted batteries and carry on their journeys within minutes.
But sales of Better Place’s fleet of Renault Fluence cars were slow as consumers hesitated to endorse Agassi’s battery-swap model. The swapping stations were expensive, too. Originally meant to cost $500,000 to build, they ended up at $2 million or more. A petrol station, by contrast, costs about $800,000, according to Goldman Sachs analysts.
Better Place folded in May 2013, six years after it was founded. A month later, Musk showed his own prototype robot that took just seconds to exchange the battery in Tesla’s flagship Model S saloon. At the time, he said it could be “what convinces people that electric cars are the future”.
Two years later, he bemoaned the lack of consumer interest in its battery-swap trials. “It’s unlikely to be something that’s worth expanding in the future,” he said.
Not only is battery swapping expensive, with doubts about how it will be received by customers, it is also hard to scale. Car manufacturers that make electric vehicles pride themselves on the quality of their own technology, meaning the industry has pumped the market with many types of batteries.
“Fundamentally, [battery swapping] will only work if it’s one make of car,” says David Martell, chief executive of Chargemaster, which manufactures and installs conventional charging posts. “Every manufacturer’s key selling point is the battery. Any battery swap station would have to have dozens of battery types.”
The batteries also tend to be heavy — the 85 kWh Tesla battery weighs more than half a tonne — and are often integral to the cars, making swapping a protracted process requiring robots.
Electric vehicle advocates say battery swapping is culturally counter to battery-powered travel. The desire to fully refuel within minutes originates from the thinking surrounding petrol and diesel cars.
“Before you’ve driven an electric car, battery swapping sounds like a great idea,” says Michael Hurwitz, who is responsible for sustainable transport energy in the UK government. Seasoned electric vehicle users like to charge whenever they park. “You just realise there are 23 productive hours in the day that are free for charging the vehicle.”
All of which makes Gogoro look bold, if not misguided. Why is Luke trying to pursue battery swapping?
Part of the reason is simple: he is not doing it with cars. Gogoro scooters need less energy and carry smaller batteries, which are lighter at 9kg.
Scooter users have lower expectations of how far they can travel without refuelling. People tend to keep them in the city, where public charging points can be unreliable and users often have no access to a garage. That means swapping makes sense, Gogoro says.
The ease of exchanging the batteries and their smaller size mean swap stations are cheaper, at about $10,000 for a simple stand inside a 7-Eleven convenience store, Gogoro says.
The company believes that there is a need for battery swapping. At the mass-market level, electric vehicles remain hamstrung by compromise: charging can be slow and range is often limited in the more affordable models. Not even Tesla has managed to crack that problem.
The early signs are good. Gogoro is taking more than 5 per cent of new scooter registrations in Taipai, which has the highest number of motorised two-wheelers per head in the world. It announced this month that it had raised $130 million in additional funding from investors, including Panasonic, taking the total raised to more than $180 million.
Gogoro now thinks it has economics in its favour. Battery costs are falling by about 6 per cent a year, it says. Gas prices are low at the moment but the long-term trend is upward.
“That point of convergence will [come] and that’s what Gogoro is working on — perfecting the technology, perfecting the infrastructure, perfecting the brand and the awareness that battery swapping is OK,” says Luke.
“Once the gas price exceeds the battery price per kilometre, that’s when it all makes sense.”
— Financial Times
