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Chinese electric vehicle maker Nio is betting that battery exchange will play a key role in its challenge to Tesla in the world’s largest car market, even after its American rival shunned the expensive technology .
Battery exchange allows drivers to quickly replace the exhausted battery with a fully charged one at specially equipped service stations. In April, New York-listed Nio partnered with state-owned group Sinopec as part of plans to double its network of these stations across China to 500 this year.
Nio also plans to open battery exchange stations in Norway this year as part of its expansion in Europe.
“Many of our users tell us that the battery change was the reason they chose this car,” Shen Fei, Nio’s vice president for energy management, told the Financial Times, adding that many drivers Chinese cities do not have access to home-based electric vehicles. loading. “Battery exchange is already at the core of our competitiveness.”
Nio is one of several Chinese carmakers trying to challenge Tesla’s leading position in the country’s high-end electric vehicle market. The US group has been under pressure recently in China after its confusing manipulation of a high-profile customer protest turned into a advertising nightmare.
Nio, listed in New York, has partnered with state oil group Sinopec as part of plans to double its network of these stations across China to 500 this year © Nio
China, the largest market for battery-powered and hybrid vehicles, is an atypical value in an industry that has focused on developing infrastructure to support charging at home and at stations.
Geely, China’s largest private car maker for sales, plans to build 100 interchange stations in the southern city of Chongqing this year before deploying facilities in other parts of the country.
Beijing New Energy Vehicles, a subsidiary of state-owned automaker Baic Motors, is aimed at electric taxi fleets and operates 121 interchange stations.
Global interest in changing batteries has faded in recent years, in part due to high costs. Tesla completed a two-year test of its own exchange system in 2015 after lukewarm customer acquisition.
The technology has benefited from strong support from Beijing. Last year, the government made the battery change a requirement to receive subsidies for electric vehicles at a price of 300,000 Rmb or more, to an extent that benefited Nio.
An appeal of the battery change for drivers is that it reduces upfront costs. Nio last year launched a subscription option for batteries that allows customers to buy cars without a power supply, reducing the purchase price by about $ 10,000.
However, some analysts are not convinced, noting the high costs of building stations. They argue that the fast charging systems developed by Tesla and others are more efficient once the overall operating costs and the potential to charge several vehicles simultaneously are taken into account, despite being slower than changing the battery.
Whether Nio and others can make battery exchange profitable depends on the use of stations and the reduction of operating costs through automation, said Edison Yu, an analyst at Deutsche Bank.
Nio, which was founded in 2014, has previously struggled to build a battery-sharing infrastructure. A cash flow crisis in 2019 meant it lags far behind the first targets of 1,100 station exchanges in 2020. The group revived its expansion efforts after securing state support of $ 989 million investment early last year.
Shen, Nio’s executive, believes the battery exchange will help Chinese vehicle manufacturers open up an advantage over their foreign competitors, who are unlikely to adopt the technology. “Regardless of whether or not it’s the industry’s ultimate game, Chinese carmakers want to win now,” he said.
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