Accelerating EV adoption in broader income groups: Battery swapping centers and their implications for business, customer, and government

Abstract

This study explores the potential of a subscription-based Battery Swapping Centers (BSCs) business model to address financial barriers hindering Electric Vehicle (EV) adoption, using the Republic of Korea case study. It conducts analyses to evaluate the economic feasibility and affordability of BSCs from the point-of-view of the business owners, customers, and government in the 2023 and 2030 cases. The optimal monthly subscription fees were determined to be $194.2 for 2023 and $150 for 2030, this costs balance the reasonable business profitability and customer affordability. Subsequently, the Total Cost of Ownership (TCO) assessment reveals that BSCbased EVs offer lower costs compared to conventional EVs. An in-depth analysis of customer affordability across income quintiles shows that the BSC business model expands the affordability of the EV to the 4th quintile, in contrast to the conventional EV business model that only affordable to the 5th quintile. However, substantial government incentives remain essential for widespread adoption. For the government, BSC-based EVs require less incentive than other alternatives. Additionally, the BSC business model can make EVs affordable to the majority of the population with less government support compared to the current incentive.