Battery Leasing Service

Battery Leasing Service

The battery leasing service market is on the rise as it has proven to be a profitable and sustainable business model for owning electric vehicles (EVs) and energy storage systems. This option provides more flexibility in terms of upgrading as well as lowers the initial cost because users do not buy batteries but lease them. This model responds to one of the major challenges of EV implementation – the batteries’ expensive costs. From the business side, it is beneficial because it requires less capital investment at the beginning and sustains evenly and regularly distributed operational costs.

Several European companies are exploring battery leasing services for fleet operators for better efficiency and sustainability. This model could be scaled up to other sectors where energy storage systems are essential, especially in renewable energy projects and industries. As the sales of EVs continue to grow so as the demand for new-generation battery solutions that are more flexible, economical, and have high energy density. Furthermore, the existing government support for the deployment of green technologies and the increasing interest in the circular economy, including the recycling of batteries, create the foundation for the development of battery leasing services. In terms of the overall industry outlook, the model has significant synergy with the burgeoning emphasis on the sharing economy and sustainability, thereby bolstering the sector’s potential for growth.

• Based on the business model, the Battery leasing service market is categorized into subscription service and pay-per-use model. Subscription service caters significant share of the battery leasing service market. This is mainly attributed to the long-term benefits it offers to both consumers and businesses. The subscription model has a monthly or yearly basis for the customers which is easy to understand and manage, the cost structure of battery usage is also stabilized to attract more customers which are electric vehicle users and commercial vehicle fleet owners. Through maintenance services, battery replacement, and upgrades, it ensures that end-users are protected from battery degradation. Moreover, the company makes battery lifecycle management possible through subscriptions and encourages the recycling of batteries. On the other hand, the pay-per-use model is flexible, but it does not offer the same level of predictability and support that is necessary for long-term consumers.
• Based on battery type, the battery leasing service market is bifurcated into lithium-ion and nickel metal hybrid. Lithium-ion segment caters significant share of the market. As lithium-ion batteries have a higher energy density, which enables them to store energy and give better range in EVs over other types of battery technology, Lithium-ion batteries are preferred by manufacturers and consumers. Currently, lithium-ion batteries are installed in most of the new generation EVs both in passenger cars and commercial vehicles due to their high energy density, comparatively low mass, and shorter charging time compared to NiMH batteries.
• Based on vehicle type, the market is segmented into passenger vehicles and commercial vehicles. The passenger vehicle catered to a significant share of the battery leasing service market. The factors attributed to the increasing pace of electric vehicle (EV) consumers where high battery costs define the prices. Furthermore, market leaders of passenger vehicles such as Tesla, Renault, and BMW have experimented with battery leasing schemes to set themselves apart from the competition and appeal to green-conscious consumers. For instance, Renault has implemented battery leasing specific to its Zoe EV, which creates electric mobility to target a greater share of people. Furthermore, new government policies and subsidies for environmentally friendly transport have contributed to the further development of the segment of passenger vehicles as the population is in pursuit of affordable and efficient means of transportation.
• For a better understanding of the market adoption of Battery leasing services, the market is analyzed based on its worldwide presence in countries such as North America (U.S., Canada, and the Rest of North America), Europe (Germany, UK, France, Spain, Rest of Europe), Asia-Pacific (China, India, Japan, and Rest of Asia-Pacific), Rest of World. Asia-Pacific has significantly contributed to the expansion of the Battery leasing service market. The battery leasing market is highly tilted towards the Asia Pacific region owing to a growing EV market, supportive government policies, and a customer shifting towards affordable modes of transportation. Currently, China, India, Japan, and South Korea have reported high rates of electric vehicle uptake based on ambitious national goals set for green energy consumption and low-emission transportation systems.

In addition, various governments in the region are providing incentives, subsidies, and tax exemptions for EV and battery leasing models to improve mass market appeal. China’s market has received a boost, due to the key players such as CATL and BYD in battery manufacturing and, the innovations such as battery swapping and leasing solutions. In large population concentration areas, battery leasing is also popular to minimize the charging time and worries about battery durability. Therefore, with rapid progress in battery leasing infrastructure, the Asia Pacific region will continue to dominate the global battery leasing market in the coming years.

• Some of the major players operating in the market include Hyundai, Tesla Power USA, Proterra, Volkswagen, Numocity, Ocotillo Power Systems, Oyika Pte Ltd., Renault Group, VoltUp, and Kia Motors Inc.