Cleantech Market Intelligence
E-Scooters Get Their Own Network
A San Francisco-based startup with Asian roots called Gogoro announced on January 5 that it is launching a line of futuristic battery-powered electric scooters and an e-scooter charging network that, for a monthly fee, will provide unlimited battery swapping and cloud connectivity. The concept of battery swapping for electric vehicles has been tried before – most notably with the epic failure of Israeli startup Better Place (and with a little bit more success by Tesla Motors). But this venture might have a much happier ending.
To understand how Gogoro might succeed, let’s first examine why Better Place failed. Although the company made a number of personnel and strategic missteps, the fundamental problem of the Better Place model was that the battery switching stations were too expensive and too complex. Another major problem was that the financial projections didn’t pan out because battery costs were still too expensive at the time of the firm’s launch in 2012.
Swap It Out
Gogoro, which has engineering facilities in Taiwan and whose CEO, Horace Luke, was the design mastermind behind Taiwanese cell phone manufacturer HTC, solves the complexity issue with a smaller battery pack: the Gogoro Smartscooter uses two batteries, each about the size of a Kleenex box and containing about 1 kWh of energy. The user merely takes the battery out by hand and inserts it into the vending machine-like switching station. Six seconds later, a fully charged battery comes out of the machine and can easily be reinserted into the scooter. A fully charged pair of batteries provides the user almost 60 miles of range in an urban driving environment.
To solve the battery cost problem, Gogoro has two aces up its sleeve. The first is timing: we are in a period of dramatically shrinking lithium ion battery costs. What would have cost more than $1,000 per kWh a few years ago can be had for as little as a third of that today.
Gogoro’s other advantage is its strategic partnership with Panasonic, one of the largest battery manufacturers in the world. Gogoro will use the same battery cells, made by Panasonic, that are used by Tesla Motors for its Model S battery pack. And if it can grow quickly enough, Gogoro will get Tesla-type volume discounts. Navigant Research estimates that Tesla pays approximately $200 per kWh for its Panasonic cells today, and that price is expected to drop as low as $130 per kWh by 2020 once the recently announced Tesla/Panasonic Gigafactory is up to full capacity.
Cool and Clean
Gogoro has one more big advantage going for it: the world’s young people are begging for alternatives to car ownership. They want clean, affordable, yet stylish transportation alternatives. This trend is as true in scooter-crazy Asian cities as it is in North America. Traditional scooters are too dirty, dorky, and noisy to provide an appealing car substitute for most young people. But Gogoro’s scooter will be affordable enough (although pricing hasn’t been announced, it should be cheaper than most other e-scooter options because the battery isn’t part of the purchase price) and stylish enough (CEO Horace Luke is a renowned industrial designer whose accomplishments include the Xbox game console and the much lauded HTC smartphone lineup) to be attractive to young urban dwellers in many countries.