Battery As A Service Business Model

In the article, we’ll explore the ramifications of company called We Power’s plan to have autonomous electric car batteries charging stations all across America. From billboards and utility plants, to parking lots and back offices, ‘the place next to your head’ will soon be revolutionized.

Overview of Battery As A Service Business Models

Consumers now want increasing benefits from their purchases and in many instances, these are often not fully understood. Battery As A Service (BaaS) models were created in order to address these issues, offering consumers more power and convenience for a fee. BaaS businesses take ownership of the battery and make it available for consumers on an as need basis. Consumers pay instead of buying batteries outright-equipping them with funds to spend on other goods or services.

As a battery technology, we saw an increase of 146% in the annual sales of Lithium-ion batteries from 2016 to 2017.

Battery systems are a primary part of our everyday lives. From the toothbrush that keeps us up and running to our phones that allow us to talk to people from anywhere, mobile devices depend on batteries in order to run. The battery market is not without competition, but now Tesla wants to make battery technology more accessible for consumers by offering them an all-inclusive service to manage and maintain their batteries through the use of electric vehicle chargers installed throughout the United States in service stations.

Benefits of battery as a service

A battery as a service company provides batteries as necessary resources to customers. Battery as a service companies have four main benefits. They can lower costs, increase efficiency and reduce lead time on projects. These benefits save money for the customer and increase trust in the work because they don’t have to worry about any material acquisition or installation expenses.

Taking the battery industry as an example, batteries have many benefits. The first and most important benefit is generating plentiful power for plants that can make more clean energy. The second is making the production of new batteries to be efficient and economical. Finally, there are health benefits because not having to worry about manufacturing and purchasing batteries has reduced exposure to materials like nickel and lead.

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A battery as a service business model would make it easier for borrowers to get loans, cut down on annual maintenance costs, and offer an alternative to car ownership.

Why do companies use the BaaS Business Model?

Companies need a way to improve their production, so they make use of the batteryless service. Additionally, it helps these companies sell more products. Comparing the old ways of producing and manufacturing products, the new BaaS model is much cheaper in comparison. In more ways than one, companies are now improving their financials and productivity thanks to this hybrid model.

Companies who offer battery as a service (BaaS), like Tesla, can offer this as an alternative to using batteries. BaaS provides less up-front cost and can keep costs low by maintaining the existing fleet and adding new models of the car without leaving any margin once the units have been sold.

amboo utilizes the BaaS business model and commercializes software for robo-cab booking, for instance
The general movement is to reduce what once was hundreds of transactions to a few transactions with machine learning..

The 4 types of battery as a service models

a battery as a service company offers completely new option. It builds or owns the batteries, integrating them into a new range of products and providing as-a-service services in n number of markets and industry. There is no need to build and maintain their own fleet of vans or trucks anymore. They just produce smaller, more efficient batteries and provide an early adopter set of assistance possibilities that reduce or even eliminate the cost associated with installing out-of-house battery storage facilities.

There are four types of battery supply as a service models. The first is the energy efficiency model. This model provides less energy than needed and captures the unused energy during discharges at night to power low-use locations in your business, such as office buildings, factories, or retail stores. The second type of EPS model is the off-grid model. This provides a small amount of battery but still uses grid power when demand exceeds available supply on a schedule determined by the provider.
The third type is blockchain aggregation model. This is a new supply as a service hybrid model that offers safe and reliable dedicated DC battery storage in addition to access to an easy-to-use API for delivering bulk large magnitude power projects donated by think & do tankers or individual households within a community network contingent upon agreement between them and the aggregator or local stakeholders while supported by real time payment, transparency, traceability and smart contracts from any point in the world.”

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Many companies are using battery as a service as a marketing strategy to gain traction without the associated costs of owning batteries. This is because they aren’t ownership but rather pay-as-you-use models which only need to ship a set number of batteries per month or year. The other three types of battery as a service models are leasing, renting, and purchasing.

BaaS example

A good example of BaaS is Amazon Web Services (“AWS”). As an alternative to running a server your own hardware, you pay AWS by the hour to provide the hardware that you need. For AWS this makes their costs more predictable and projects easier to plan for.

Scientific American published a piece on the growth of companies obtaining energy through battery-as-a-service business models last November. The article mentioned how these companies can assure long-term electric power at a fraction of the wholesale cost of traditional power. It also gave an example of 26 corporations that are choosing BAAS.

Electric vehicle manufacturer Tesla will provide models to consumers as a subscription model. This is one way of sustaining the business by providing a service business model as opposed to carrying out sales campaigns. Customers would have access to exclusive, time-limited features, upgrades, and an expedited pipeline for support.

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Conclusion

A Business Model is any business concept which informs the operation of a company. A framework for how to plan, finance, and operate a business. This could be likened to a code. Operating differently from others in this way makes it difficult for consumers to understand or trust compared to what has emerged as the industry’s dominant unit. Around battery chemistry, different principles are applied allowing new technology to emerge with cheaper and smarter battery systems over time that improve environmental pollution while increasing output to power and industrial systems.

After looking at the pros and cons of each, the idea for the battery as a service
business model was chosen. The company will have to use estimations from public accounts and industry knowledge to get accurate sales figures.

Most discussions about how to solve the battery problem revolve around investing more directly into research and development. The end result would be more batteries that are more efficient, longer lasting, and cheaper. This might seem like a good strategy on paper, but who should pay for alternative energy infrastructure?
Tesla Battery Service
The Tesla Battery service offers a cost-effective alternative solution to ending the battery problem. There are no upfront costs and customers will not have to worry about finding a charging station nearby or even having power in their garage to charge the batteries in their home or office. And unlike most energy companies, they don’t need an investor like General Electric to get off the ground because they serve customers with minimal overhead cost on transportation

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