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By Meg Flippin Benzinga
The world may have no choice but to transition to electric vehicles (EVs), with or without the help of government incentives and regulations. The environment demands it, and that is a big reason why sales of EVs are estimated to grow by double-digits on average every year. By 2030, there are expected to be 40 million EVs traversing the roads and bridges around the world. However, to reach mass adoption and replace gas-guzzling, emissions-producing vehicles, some challenges need to be addressed – particularly when it comes to charging infrastructure.
Concerns about range, battery life and availability of charging stations loom large in the decision-making process for consumers. Fears of getting stuck or waiting hours to charge up keep many consumers on the sidelines. Studies show consumers are still reluctant to purchase an EV, despite expressing interest in this type of vehicle.
The current charging experience makes this reluctance understandable. Charging stations have been reported to experience lots of reliability issues from damaged and broken charging cords to network failures. Many consumers complain of unresponsive screens and slow charging speeds. Charging stations have been slow to roll out which can cause congestions at the available locations. None of this bodes well for a future in which EVs are ubiquitous.
Swapping Instead Of Charging
U Power Limited (NASDAQ: UCAR), the Chinese EV power solution company, is aiming to change this dynamic with its advanced UOTTA technology. This technology enables consumers and fleet operators to replace dead EV batteries with fully charged ones in under five minutes. That removes the time challenges, and with swapping stations eventually located throughout China, it eliminates the fear of running out of battery life. The company offers customers an entire battery-swapping ecosystem, from building the infrastructure to managing it.
Its prowess in the industry was recently on display, entering into yet another partnership to further its technology in the marketplace – this time with SAIC Motor-CP, the Chinese auto manufacturer. U Power signed a cooperation agreement with SAIC Motor-CP to integrate its battery-swapping technology into MG brand vehicles in Thailand. Initially the partnership is focused on the taxi and ride-hailing markets in Thailand, with plans for future expansion.
The two companies are combining U Power's UOTTA battery-swapping technology with SAIC Motor-CP's automotive expertise to address charging infrastructure challenges in Thailand's growing EV market. U Power will adapt its technology and develop a network of swapping stations, while SAIC Motor-CP will provide technical expertise and warranty support.
Lots Of EVs To Charge
It's a big deal for U Power, given the taxi and ride-sharing market in Thailand is big, with more than 300,000 vehicles providing rides to customers. Projections call for 50% of the vehicles to be electric within five years, which creates a potential market of 150,000 vehicles for U Power to serve. The company said that the rate of EVs on the roads supports a network of 500 to 750 battery-swapping stations across major urban centers.
Then there’s Thailand’s EV3.5 policy, which was created to encourage EV development. It includes subsidies and the reduction of import and excise taxes on batteries. That policy is expected to boost annual EV adoption growth to between 30% and 40%, reports U Power.
“This partnership represents a significant milestone in accelerating electric vehicle adoption in Thailand's commercial transportation sector," said Li Jia, Chairman and CEO of U Power. “ Our battery-swapping technology offers a practical solution to the charging challenges faced by high-utilization vehicles. In addition, this collaboration builds on strong existing relationships between our two companies, notably through Chatchaval Jiaravanon, U Power's second-largest shareholder and member of the Thai CP Group family, whose deep understanding of both organizations has helped facilitate this strategic alignment. We are eager to work together to drive innovation and build the foundation for Thailand's EV future.”
Commercial Markets First
Given the sheer size of the commercial market it’s not surprising that U Power and SAIC Motor-CP are focused on that area in the deal’s first iteration. It provides consistent revenue streams and faster ROI than the consumer market, reports U Power. To pull it off, U Power said its UOTTA technology has to be adapted for tropical climate conditions, a localized battery management system has to be developed and the charging stations need to be integrated with Thailand’s power grid infrastructure. If it works out, the companies said it could be a model for further expansion as they try to overhaul the charging battery market.
“The ability to quickly swap batteries rather than wait for charging will be transformative for the taxi and ride-hailing sectors, where vehicle downtime directly impacts business performance,” added Feng Zhao, President of SAIC-Motor CP. “We are confident this collaboration will accelerate Thailand's transition to sustainable commercial transportation while establishing a model that can be replicated in other markets."
Feature photo by Dan Freeman on Unsplash.
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