The conversation around widespread electric vehicle adoption has been inherently linked with charging: Are the chargers plentiful? Will they charge my car fast enough? Are they plugged into a grid that’s not entirely run by coal?
Billions of dollars have gone into developing batteries that can handle fast charges as well as chargers that can top up a vehicle in as little as 20 minutes. Few, at least in the U.S., are really talking about battery swapping for cars and trucks.
Ample happens to be among the few leading that charge.
Ample, which rose from the ashes of its unsuccessful predecessor, Better Place, has brought battery swapping to San Francisco and soon will introduce the tech to Japan and Madrid through a series of partnerships with fleet partners like Repsol and Eneos. Unlike its predecessor, Ample doesn’t try to deploy battery-swapping stations until it knows it’ll have the customers to use them.
Since we last checked in with Ample’s co-founder and president John de Souza a year ago, the San Francisco-based startup has quietly grown, building new swapping stations and signing on additional fleet partners around the globe.
Meanwhile, battery-swapping tech for cars has gained footing in China. Beijing is throwing its weight behind a few companies advancing the technology as part of its broader plan to ensure 25% of all cars sold are electric by 2025. Automakers Nio and Geely, battery-swapping tech developer Aulton and oil producer Sinopec said this year they plan to build 24,000 swapping stations across China by 2025. Today there are 1,400.
We caught up with de Souza to talk about the implications of China’s investment in battery swapping, why scaling fast-charging infrastructure is a lot harder than we think and sought his advice on how hardware startups can scale while staying lean.
(Editor’s note: The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity.)
You’re calling me from Madrid, which you had said Ample was targeting as its next launch city.
Yes, we are deploying in Madrid as we speak. We’re partnering with Repsol to quickly deploy a wide network; Uber to work with ride-sharing fleet managers; and automakers (which we haven’t announced publicly yet) to deliver vehicles with the Ample solution.
From a customer standpoint, our partnerships focus on ride-sharing, car-sharing and last-mile delivery.
Battery swapping can be difficult to pull off because it requires some standardization of the battery. Ample provides modular battery swapping, which means you don’t swap the entire battery pack. Can you explain why that’s significant?
There are two aspects to Ample’s modular battery swapping that are significant. Firstly, it allows the flexibility to fit our packs into vehicles of different sizes and shapes by rearranging the modular batteries. That means we can allow for different capacities by varying the number of modules. It also makes our stations, which are run robotically, more cost-effective, because you’re moving lighter modules instead of traditional packs.
Secondly, Ample’s patent to allow modules to adjust to electrical characteristics of vehicles means we can work with OEMs without requiring any changes to the vehicle. We can also use the same modules in different vehicles, which makes it easy to introduce new chemistries into cars.
You say Ample’s batteries are vehicle agnostic, but you still need to work with automakers in some way to ensure they don’t put their own batteries in the vehicle, right?
We work with automakers on being able to purchase cars without batteries. As we work with them more closely, it’s to give them a replacement battery. They might get their batteries from Samsung, LG or CATL, but we can give them a battery that’s a drop-in replacement. So just as a customer might choose the type of tires or seats they want in the car, they can one day choose which batteries they want to use. If they put our batteries in, it’s swappable. If they put their own, they’re not.
Ample was tracking to get to 1,000 vehicles with swappable batteries in the Bay Area by the end of the year. Have you achieved that goal?
We’re not releasing the numbers, but we do have 12 stations currently deployed. We’ll be getting to 30 stations in the Bay Area before the end of next year.
What types of fleets work best for scaling EV battery swapping?
We initially thought that people who need high mileage would be a natural fit for battery swapping. But we realized that the low-mileage case is an interesting problem.
If you’re in a city like San Francisco and you deploy vehicles, the vehicles don’t drive around that much. They might do 30 miles a day. But the cost to tee up a lot and put chargers in is tremendous. You could be paying about $20,000 per charger. If you buy 400 cars, you spend $8 billion installing chargers.
The other problem to solve with the low-mileage use case is that you’re buying a bigger battery than you need. These cars come with a 300-kilometer battery range, and they don’t need that much. So for those fleets, right-sizing the battery could save a lot of money and swapping batteries allows for longevity on the vehicle itself.
China seems to be embracing this technology more than the U.S. What do you think China has that the U.S. doesn’t have?
Two things: scale and customer base. China has achieved such a high level of EV deployment that their initial assumption, that charging alone could address the EV infrastructure’s needs, started getting challenged. They needed to incorporate other solutions to continue scaling.
Also, the use cases that China has enabled for EVs are considerably wider. While the majority of users in the U.S. tend to be affluent owners with parking garages and low daily usage, EV users in China include taxi fleets, last-mile delivery and lower-income users that don’t have the same access to charging that U.S. users have.
For automakers, it’s becoming a competitive advantage to build better batteries that last longer and can charge quicker, and there are plenty of developments in fast charging. Are you concerned that these advancements will happen before battery swapping can take hold?
China has the most fast chargers per electric car in the world. They have 82% of all the fast chargers and 56% of electric vehicles out there. They had the density, and they’ve still made it a strategic priority to deploy battery swapping.
When we started thinking about this eight years ago, people told us that in two years, we’ll have all these 350 KW and 500 KW chargers. We don’t have a lot of those today, and the problems just haven’t gone away. Deploying fast chargers is very expensive; the batteries degrade quickly. Fast chargers also lose efficiency the faster they go. As you get closer to cities, the grids can’t even support them. If you’re working with fleets and installing fast chargers, the grid upgrades probably cost four times what you need for swapping.
Today, Ample can swap a battery in 10 minutes, and we’ll halve that by early next year. If you want to get a fast charger to charge a vehicle in five to 10 minutes, you need a 1 MW or 2 MW charger, which we know is nowhere near the horizon.
What have you learned from your pilot with Uber?
The government says it wants ride-sharing to go electric. Fine, but if the driver spends 10 to 12 hours a week charging, which is time they aren’t spending on the road, they make less money. The driver is effectively subsidizing the EV transition, and there is a top-line penalty for drivers who make that switch. I think there’s another way that economically makes sense for drivers to make that switch.
Also, in the U.S., about 40% of EV chargers are broken. The subsidies from the government are just for installing the chargers, but there’s no path to maintaining them.
When we last spoke, you said that if there’s a fool in the room and you don’t know who it is, it might be you. In the last year, no one in the U.S. has come forward with a rival battery-swapping company. Does that make you nervous?
Are there other solutions that could meet the needs of battery charging? You always have to watch out for that, but is it realistic to think we can have chargers that charge in five minutes coming soon? There are massive challenges to that, and we haven’t seen many solutions.
If you go outside the U.S., we’ve seen a lot of battery swapping. In Asia, it’s predominantly two-wheelers, but we’re also seeing Japanese companies making custom trucks with swappable batteries. The part that’s hard to solve is using the same battery across vehicles, and it’s easier to standardize the batteries for two-wheelers. China has started to solve it with four-wheelers in a very Chinese way with lots of government support.
We’re seeing swapping proliferating, and we have one solution that’s unique and is the key to bringing it to everybody else.
You’ve raised almost $276 million to date, and your last round closed in November 2021. Are you trying to raise more now?
We want to raise more debt and asset-backed financing. We think debt will help us do large deployments because we work primarily with fleets. We don’t actually have to deploy infrastructure until we have a fleet customer signed on. That allows us to finance against the batteries and the stations.
Since we work with corporations with known credit ratings that sign on for multiyear contracts, from a loan perspective, they’re not just lending money to a startup. They’re lending it to an Amazon or a Walmart — a large corporation they feel comfortable lending to.
The funding environment is tight right now, and battery swapping is expensive. Do you have any advice for founders on how to scale while staying lean?
It’s tricky with hardware; every year, you need to start selling from zero. It was really important for us to come up with a recurring revenue model. You want to end the year with visibility on revenue.
Also, if you’re buying hardware, you need to time it between signing a contract and building. Otherwise, you might just end up spending a lot of money building something without money in the pipeline. If you combine those two with asset-backed financing, you don’t even need to put up the capital yourself.
That combination is what has helped us to go after it and use a lot of CapEx without taking the risk.
Where do you think Ample will be by the end of 2023?
We’ll be announcing big station efficiencies. We spent a lot of time getting feedback on how to make a better experience, and we’ll announce a new station that addresses that.
We also hope to be fully live in multiple cities with different types of fleet partners. Finally, we’re going to expand the range of vehicles we service. We’ve already announced passenger cars, and next year, we’ll expand that range a lot, even into delivery trucks. We want to prove that the stations can serve different types of vehicles and the need for battery swapping extends far beyond passenger cars.
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