Batteries as a Service: Why It Works (and Why It Probably Won’t Work in the West)

Battery as a Service, also known as BaaS, has been gaining traction in the world of electric vehicles. The idea? Instead of buying a car and its battery, you just buy the car. You then subscribe to a battery swapping service with a network of stations that supply charged batteries. When you’re running low, you pull in and get a fresh battery in under five minutes.

It’s a win in multiple ways. First, EVs become much cheaper upfront, since the battery makes up 30–40% of the vehicle’s cost. This increases demand by making EV’s accessible to more buyers. Second, it solves a major pain point with EVs: charging time.

So where is BaaS actually working? Two countries: China and India. Both have high density urban populations, minimal access to home charging, and governments that are actively pushing for EV growth. China, in particular, is leading the charge.

Most people in China live in apartments; not houses with garages. That means at-home charging isn’t an option. Enter companies like NIO, who build battery-swapping stations across the country. Thanks to heavy government regulation and battery standardization, one station can serve almost all of the different car brands.

In short, China has made BaaS work by going all-in. The government helps by offering funding and legislation. Companies innovate efficient designs, and consumers buy cheaper cars.

But here’s the thing—BaaS only really makes sense in dense urban areas. In suburban or rural places (including most of the U.S. and Europe), many EV drivers live in single-family homes and already have access to overnight charging in their garage.

In these markets, even if battery swapping were cost effective with at-home charging, it still wouldn’t catch on—because companies wouldn’t make back what they spent on hardware and setup.

That said, BaaS continues to branch out into new markets:

Two- and three-wheelers in India: Their batteries are small, easy to swap, and they mostly operate in crowded cities. India even drafted a battery swapping policy to support this model.

Commercial fleets: In both China and India, BaaS is being used in commercial fleets because efficiency equals cost savings.

Now, let’s talk about why BaaS hasn’t really taken off in the West—and why it probably never will.

For starters, there’s no standard battery design across car brands. Every company wants to protect its tech and patents, so they’re not exactly eager to build something other companies can use and profit from.

Then there’s the issue of infrastructure. Western countries just don’t have the kind of centralized control that countries like China do. The rollout of battery-swapping stations by any single company would be too slow, and by the time it’s done, fast-charging tech might already have caught up.

There is one possible benefit of BaaS that doesn’t get enough recognition: using EV batteries as a part of the electrical grid. In theory, batteries could charge up during low-demand hours and feed electricity back into the grid when it’s needed most, known as vehicle to grid.

But even here, BaaS is kind of outshined. Old EV batteries are already being repurposed into stationary storage, and they’re doing a better job at a cheaper cost.

BaaS might not be the global EV solution, but it still has a role to play in the energy transition. It flourishes in the right conditions: dense urban areas; strong government support; and standardized battery designs.

Instead of trying to copy-and-paste the model, maybe we should learn from it. BaaS effectively solves electrified personal mobility in dense urban areas. What can this model teach us about bringing EV’s to dense urban centers in the U.S. and Europe? Build more public charging stations. Improve our power grid. Figure out better ways to recycle and reuse batteries. If we focus on long-term planning and smart infrastructure, we can still make electric vehicles work for everyone anywhere, regardless of whether we’re swapping batteries, building publicly accessible superchargers, or just charging at home.

Maxwell Wang

Incoming Undergraduate Student, Environmental Science

Maxwell Wang is an incoming student at the University of Pennsylvania (30′), majoring in Environmental Science. His previous research has focused on the effects of ocean acidification on oyster larvae and he is currently working on research on utility disconnections with the Energy Justice Lab.