Real-time vehicle data to help extend battery life
With an average price estimated by Bloomberg at $151 per kWh in 2022 (source), lithium-ion automotive batteries remain expensive, despite a fall of almost 80% since 2013. As a result, the battery can account for up to 50% of the total price of a new electric vehicle, and potentially more as the vehicle ages. Therefore, it’s hardly surprising that leasing companies and funders, who are very sensitive to the issue of residual value, keep a close eye on the batteries and they are in good working order.
A damaged battery, or the risk of a dispute after a transaction
Fortunately, complete battery replacement is rarely necessary, and remains the exception. Out of a community of 15,000 vehicles tracked by the American website Recurrent, only 1.5% have had their battery changed during their lifetime (source). Nevertheless, a batteries capacity gradually deteriorates over its lifetime, in correlation with the way it is charged and discharged by the user. This raises a crucial question when it comes to reselling the vehicle: how do you manage the potential difference between the vehicle’s range as indicated on its technical data sheet and its actual range? Can a car owner take the risk of having to deal with a dispute with a dissatisfied future buyer?
Hence the need to be able to measure the State of Health (SoH) of a battery before it’s put back on the market, and to be able to give the future buyer an accurate range figure. To do this, the manufacturer can carry out a precise diagnosis for a fee. However, a number of players also offer tools or boxes that can be plugged into the vehicle’s OBD port. After a full charge and then normal use of the vehicle until it is almost completely discharged within a given time, the service provider is able to collect and analyse the data transmitted by the device, in order to estimate the state of the battery and the maximum remaining range post degredation from the initial user. No doubt, for a distributor, this process of analysis over several days seems a heavy resource task with the requirements of the used vehicle trade, which is based on rapid stock rotation and process optimisation. Even so, once the batteries loss of efficiency has been measured, the owner can only reduce the resale price, and therefore potentially recognise a loss of residual value and profit margin. But shouldn’t prevention be better than a cure?
Prevention rather than a cure
Maintaining the batteries capacity must remain a crucial issue throughout the leasing contract, and not just when the vehicle is returned. It has to be said that the batteries performance is largely determined by the way it is used by the driver, and there are many factors that can degrade it. These include excessive use beyond 80% recharge, or below 20%. According to the chargemap.org website, it is recommended to stay as often as possible within the 20-80% recharge range. Regular rapid recharging should also be avoided, as it stimulates the battery cells too aggressively. Lastly, batteries do not appreciate variations in temperature: chargemap.org advises you to park your vehicle in a covered shelter, and to activate battery pre-heating before recharging and before starting in cold weather.
These instructions should be followed by the driver for the duration of the contract, to ensure that the batteries performance is maintained as much as possible. All that remains is for the leasor/funder ensure that these instructions are followed. To do this, they need real-time, continuous access to the vehicle’s technical data. Most new cars are natively equipped with an on-board telematics system designed to transmit technical information to the manufacturer at high frequency. Manufacturers make this data available to vehicle owners in return for a fee, which can enable leasing operators to collect the raw data so that it can then be harmonised, reprocessed and used. But this tedious work of collecting and processing data, especially when it comes from several different manufacturers, in different formats and potentially the driver not providing permission to access this data from a BTC s app as they are designed to work for the drivers and not the funders. Utilising a B2B solutution where all the information can be reviewed in one place could highly assist the funders actions, how to set residual values and when to remarket the asset, providing the best return on investment.
Echoes, a neutral server and data processor
This is where Echoes, a neutral server that is independent of manufacturers, comes in with a value proposition that meets the new needs of funders. By collecting vehicle technical data from compatible manufacturers, Echoes is able to collect and harmonise all this information so that it can be displayed in a uniformed way in its dedicated live platform, where we can supply the right information for the business to make decisions. In this way, funders can access all the information they need to manage their vehicles on the road, in real time, using a single tool providing access to: location, journeys, mileage, battery charge level, mechanical alerts, accident alerts, etc.
Better still, for electric vehicles, Echoes also collects information on each recharge, in terms of power, duration and amount of energy recharged. This makes it possible to produce a weekly or monthly recharging report for each vehicle. Reports can then be set up, sharing infotmation you would like, at an individual driver level, and sent to them at a frequency of your choice. Nothing could be simpler than analysing this report, highlighting any bad practices, and contacting driver and or customers to discuss their recharging habits and raise awareness of the best ways to make their batteries last longer.
Eventually, as the electrification of fleets progresses, it will be in the interests of personal finance customers to get the most competitive monthly rental, fleet operators, leasing companies and funders to introduce charging policies to raise awareness of good charging practice among users. In this respect, monitoring vehicle data in real time, takes on its full meaning, to help define realistic charging policies, driver responsibilites, and to monitor their correct application providing the best outcome for all parties.