Renault-Nissan CEO Rejects Battery Swapping, Leaving Better Place Stranded

By · May 06, 2013

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Renault has said the Fluence Z.E. will be the last battery swap car it makes. (Photo: Motavalli)

It’s official: despite a tentative flirtation with the concept of battery swapping technology, Reanult-Nissan won’t be making any more battery-swap cars after its current battery-swap model, the Renault Fluence Z.E. sedan, ends production. That's according to Renault-Nissan C.E.O. Carlos Ghosn, from an interview late last week with Dutch website EnergiWatch.

Currently the only real commercial application of battery swap technology comes courtesy of Better Place, the troubled venture-funded electric vehicle infrastructure company with battery swap stations in Israel and Denmark. But with Better Place relying on Renault for a supply of swap-ready Fluence Z.E. sedans, the company's future (beyond only the small markets where it now operates) looks very limited.

A Heavy Reliance on Renault-Nissan

Since its inception, Better Place has made extensive use of Renault-Nissan vehicles to first prove and later implement battery swap technology.

An early Better Place technical demonstration project with electric taxi cabs in Japan used specially-converted Nissan Rogues. By 2009, Nissan’s sister company Renault had committed to providing Better Place with at least 100,000 battery-swap compatible Fluence Z.E. cars for its operations in Israel and Denmark.

Even with the support of a major automaker, Better Place’s business model has proven difficult. Company supporters claim that official Fluence Z.E. sales in Israel—at between one-half to three-quarters of total vehicle sales—is eclipsing other global EV markets. But many of the cars are deployed in fleets through complex car leasing agreements, making it difficult to verify any signs of traction. Without other swap-ready cars on the horizon, arguments about the advantages of swapping versus charging are irrelevant at best.

Despite raising more then $850 million in venture funding since 2007, Better Place has current losses totaling approximately $500 million.  Even its network of interconnected intelligent charging and battery swap stations, not to mention a sophisticated software system that helps it manage power demand for Israel’s only electricity company, hasn’t helped elevate the company's fortunes. Since launch in Israel, less than one percent of Better Place’s planned 100,000 car fleet have been sold.

Ruthless Business

As his past record will affirm, Carlos Ghosn is often astute and always decisive. For him, a project either makes money or it doesn't. It is either worth investing in, or not.

When Better Place was founded, it made sense for Ghosn to invest in battery swap technology by producing an electric car compatible with Better Place’s system. However, Renault’s investment came at the cost of Better Place: an agreement to buy 100,000 Renault Fluence Z.E. sedans, something which helped Renault break even on the car before it was even made.

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>Carlos Ghosn, Renault-Nissan CEO, says the future lies in charging batteries, not swapping them.

Moreover, unlike Better Place, electric car technology from Renault-Nissan can work with or without battery swapping. It is no coincidence that the Renault Zoe Z.E. hatchback—already on the roads of France—comes with an onboard 45-kilowatt AC rapid charger as standard, recharging the Zoe’s lithium-ion battery to 80 percent full in 30 minutes.

As recently as one month ago, Renault executives indicated that the Zoe could be offered as a future battery swap model—if there was demand. Yet now the alliance has made its mind up. As Ghosn told Energiwatch, “replaceable batteries are no longer the main path for electric vehicles...going forward, our focus is on the charging technology."

Dead End

While Renault is committed to producing the 100,000 Fluence Z.E. sedans it agreed to provide in 2008, Ghosn’s announcement dropping support of battery swapping, any way you slice it, is a massive blow to Better Place. A vibrant market requires more than one vehicle for consumers to consider.

With improving battery chemistry and rapid DC-charging preferred seen as the preferred refueling technology by most automakers, Better Place faces a tough time finding another technology partner in a major automaker.

While rapid-charging a Zoe takes longer than Fluence battery swap, the cost of implementing rapid-charging technology is far below that of a Better Place swap station.

To make matters potentially worse for Better Place, the California Air Resources Board is considering modifications to the Zero Emission Vehicle (ZEV) Regulation, which could include removing battery swapping as a “fast refueling” technology.

What's the saddest part? If Better Place had focused on the other parts of its business—including its comprehensive interconnected grid technologies designed to ensure a utility company could manage how and when each car charged—its future might have looked very different right now.

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