China’s Nio to increase battery swap providers to achieve EV infra edge

BEIJING — Chinese language electrical automobile firm Nio has been increasing its battery swap partnerships in a bid to achieve an edge on the infrastructure facet of the EV ecosystem.

Since November, Nio has partnered with no less than 4 Chinese language automakers — Changan, Geely, Chery and JAC — for growing battery swap requirements and increasing the community in China. Nio additionally introduced agreements earlier this yr to work with two native battery firms on battery swap providers.

All these efforts are geared toward assuaging customers’ nervousness about driving vary. Whereas having a big community of battery charging stations helps handle these issues, battery swapping is a quicker technique because it takes just a few minutes.

“Swapping proper now could be primarily pushed by Nio. After all, Nio discovered that is an ecosystem,” CLSA’s deputy head of analysis Ding Luo stated in an interview. “If just one participant is attempting to construct up the entire ecosystem, it is unattainable for [them]. That is why they’re pondering whether or not they can invite some companions.”

Battery swapping nonetheless is not mainstream as a result of the automobile batteries must be standardized, he added.

Whereas a charging station resembles a typical gasoline station, battery-swap know-how is housed in a shed-like construction. It makes use of machines to routinely alternate depleted batteries for pre-charged ones in appropriate automobiles.

Nio stated in mid-March that it accomplished 40 million battery swaps in contrast with almost 37 million fees at its public stations — Nio customers may entry third-party charging stations, or set up one at dwelling.

“I believe our outlook may be very easy,” Shen Fei, senior vp of Nio’s energy division, stated in Chinese language translated by CNBC. “The very first thing is to serve Nio’s customers, after which present a great battery charging and swapping expertise, make charging extra handy than refueling, and on the similar time assist the corporate promote extra automobiles.”

The corporate claims that with battery swap, drivers can get a recent cost in three minutes, in the event that they decide in for a paid battery service plan.

Shen stated extra automobile fashions shall be added to Nio’s battery swap community, whereas including that swapping can enable drivers to maintain abreast with enhancements in battery know-how. He didn’t specify which automakers will possible be added to its community.

Energy providers and different merchandise account for nearly 10% of Nio’s whole income. The corporate stated that class of “different gross sales” for 2023 grew by 69% to six.36 billion yuan ($895.9 million). Nio doesn’t get away swap station income.

In 2021, one other startup, Ample, opened its battery swap stations in the San Francisco space — geared toward Uber drivers utilizing the Nissan Leaf automobile.

Whereas it is not clear how a lot headway Ample has made within the U.S., the corporate has since expanded its partnerships abroad. Final month the corporate introduced it will serve corporate car fleets in Kyoto, Japan, whereas it teamed up with Stellantis to roll out battery swaps this yr in Madrid, Spain.

“For swapping to work it could’t be area of interest,” Tu Le, head of consultancy Sino Auto Insights, stated. “Battery stock funding is huge, so it must be amortized over plenty of swapping.”

However he was cautious on whether or not Nio might promote sufficient of its personal premium-priced automobiles to make the economics work. “For now I nonetheless suppose the mixture of swapping and charging makes for a reasonably engaging function set, however swapping alone possible does not assist them promote that many extra automobiles.”

“I believe the nudge the Chinese language authorities gave to encourage others to affix forces with Nio on swapping might create the required pool of automobiles to make swapping viable,” he added.

Nio is the primary main electrical automobile firm to roll out battery swap stations along with charging stations, alongside its personal automobiles in mainland China and Europe.

The corporate has put in greater than 2,300 battery swap stations, and plans to put in 1,000 extra this yr.

Nio’s funding in battery swap stations is about two years forward of market demand, CEO William Li stated final month, including that lower than a fifth of battery swap stations that Nio operates are processing 60 orders a day, possible the minimal orders wanted for a station to interrupt even.

Nio’s battery charging stations, then again, reached profitability final yr, in keeping with the corporate. It plans to construct 20,000 extra this yr.

Passenger automobile battery swap stations can value round $500,000 to construct, whereas a comparatively fundamental charging station with two ports prices round $200,000 to $300,000, in keeping with Shay Natarajan, a North America-based associate at Mobility Impression Companions, a personal fairness fund that invests in transportation.

CLSA’s Luo stated companies additionally desire to put money into regular charging stations than swap stations as a result of they make a better return. But when companies need to set up faster-charging stations, he stated they could face energy grid challenges.

CLSA’s evaluation discovered that the facility required for 5 superchargers in a single location could be greater than what 300 households would usually devour.

Tesla can be collaborating with automakers in battery charging, with its over 50,000 superchargers worldwide that declare to revive about two-thirds of a battery’s cost in quarter-hour.

In February, Ford reached a deal that enables its electrical automobiles to use Tesla’s superchargers in North America. Common Motors introduced the same settlement final yr.

Final month, the corporate introduced a partnership with battery big Contemporary Amperex Technology to develop batteries with an extended lifespan, significantly for these utilized in swap stations.

Nio claimed that through the use of battery swap and large knowledge, it could retain 80% of a battery’s capability after 12 years of use. Nio additionally stated final month that CATL will develop batteries with longer lives for the corporate.

— CNBC’s Lora Kolodny and Michael Wayland contributed to this report.