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Battery Backwards Compatibility: The Key To Unlocking Brand Value

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To go forward, we must first go backwards.

Hmm… counterintuitive to the core. But this is in fact where it all starts. Rewinding the tape takes us to a conversation I had the other night with fellow EV enthusiast, energy aficionado, and CleanTechnica reader Ted Kidd. We started talking about energy efficiency of houses, bounced off of the electricity vs energy debate, touched on electric vehicles for a bit, and wobbled through a bit more energy efficiency discussion. As minutes turned into hours and one dropped call turned into two (or maybe it was just one?) and our discussion flowed back to EVs, the conversation struck gold. At least it felt that way to me.

Digging into EVs, I started unpacking the drawbacks to current EVs and there’s basically one big one that’s holding up the whole game and that’s range. Fix that and EVs can get bigger. Fix that and people don’t have an excuse for range anxiety. Fix that and the current generation of EVs can turn into 1 million mile cars. Fix that… and gas goes away. It becomes obsolete. It ceases to have value.

So that’s what I did. I fixed it.

As I was verbally unpacking this idea, it slammed into me just how much of a game-changer it is. But first, the idea. My wife and I have 2 EVs. They are gap EVs, temporary EVs. We know they won’t meet our needs long term and in fact will lose functionality over time as their batteries degrade. What occurred to me was that if current EV manufacturers guaranteed to support backwards-compatible battery pack upgrades for a given form factor for, say, the next 20 years… that would greatly increase our satisfaction with the cars.

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They would no longer be range-limited, deteriorating EVs. They would no longer just be “first-gen EVs,” but could go on to live long, happy lives with ranges that would carry them far beyond their current lifespan. We know the current battery technology that they are using will last 8–10 years but will also get worse between now and then. At that point, they will barely be limping by… just getting us to work and back… and that’s about it. No room to play, to get groceries, or to go shopping on a whim.

By providing a guarantee to support the current batteries for a fixed duration of time, manufacturers would effectively be increasing consumer satisfaction with their current cars. They would also instantly increase the value of all their EVs that are out on the road today. It would also instantly increase the value of all cars that are out on lease, as many more drivers would be incentivized to purchase the car at the end of the lease instead of giving it back (a trend which is all too common with the current generation of EVs).

Obviously, all of the EVs on dealer lots and elsewhere in the supply chain would increase in value as well. Today, they are 100-mile-range EVs, but consumers know that they can just upgrade to a 300-mile-range pack in 10 years and 400 in 20 years so now it’s a fully functioning, long-range EV that actually increases in value over its life. Yes, this requires capital, but why buy a new car when spending a few thousand bucks on a new pack gets you most of the same value as a totally new car for $30,000?

Net — guaranteeing backwards compatibility of battery packs by battery form factor will increase the value of the entire brand while increasing consumer satisfaction. Sounds like a bit of a win if you ask me.

On top of just financial gains, this establishes the brand as the go-to brand for EVs that people can trust. EVs people can buy and know they will be able to use for decades to come. It dispenses with the temporary brand identity that auto manufacturers seem so happy to create with the current fleet of range-limited EVs that are out on the road today. It shifts the perception of the brand from a disposable car/brand to a brand that has deep roots. A brand that’s committed. A brand that’s going to be around.

I don’t think this is just a pipe dream — this is something consumers desperately want. They don’t know they want it yet (for the most part), but they do. I’m curious to hear what you (yes, you!) have to say about this. Would a backwards compatibility guarantee get you into an EV today? Is this a game changer? Which EV manufacturer will realize this and adopt the idea first?

Images via Shutterstock, Shutterstock

 
 
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Written By

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in BYD, SolarEdge, and Tesla.

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