Berlin-based provider of micro-mobility solutions TIER Mobility, which specializes in e-scooters, steps up to tackle the charging issue, announcing on Monday that it is the first scooter-share company to introduce swappable batteries, which it called “a real game-changer in terms of sustainability”.
Equipping the scooters with swappable batteries will make the need to transport scooters to warehouses every day back and forth for charging obsolete. A new fleet of e-cargo and e-vans will enable local operations to quickly recover and replace empty batteries without relying on traditional, gas-powered vehicles. Also, the local operations teams will be responsible for safety checks and the repositioning of scooters in-line with local regulation.
As electric scooters have proliferated in US and European cities, there has been a growth in critics pointing out that these battery-powered scooters are not that eco-friendly, as they tend to have a short life, and collecting them daily to drive them to depots for charging makes them far from carbon-neutral.
“Swappable batteries are a real ecological game-changer for the entire e-scooter industry,” said Tier co-founder and CEO Lawrence Leuschner in a statement. “This is a huge step forward in our mission to change mobility for good and becoming fully carbon neutral as a company in the next 12 months.”
Tier raised $60m in its latest funding round last week, highlighting that investors are still excited about micro-mobility startups. Its big US competitors Lime and Bird have raised $765m and $548m respectively and also muscled into European cities this year.
Founded in October 2018, Tier currently operates in over 40 cities across 12 markets worldwide and has now raised a significant amount in a Series B funding round led by Mubadala Capital and Goodwater Capital.
The company also welcomes AXA Germany and Evli Growth Partners as new investors, in addition to further participation from all existing investors, including White Star Capital, Northzone, Speedinvest, Point9, Indico, Kibo Ventures, Market One Capital and selected business angels like Nico Rosberg.
The market segment of e-scooter rental systems was created in 2017 and has grown significantly since then. It is expected that the market volume worldwide in 2025 will be between 40 and 50 billion USD. The US and Europe will each be the largest submarkets, with $ 12- $ 15 billion each, China $ 6-8 billion, and the rest of the world $ 10- $ 12 billion smaller.
Tier earlier this year started to describe itself as a “micro-mobility” player, with plans to augment scooters with other transportation options. In the meantime, it’s been upgrading its fleet to more robust hardware to cut down on maintenance costs.
One of the other big sticking points that have hindered the growth of more scooter services has been regulation, and specific safety concerns, with reports of faulty software and human error- reckless driving both contributing to several accidents.
The hope for strong growth of the market and the hope to gain high market shares at the beginning of the development of the market segment will attract venture capital into the newly founded companies and will create incentives for regulators to further facilitate the segment’s access into the mobility market.