Nio (NIO 6.37%) has at all times been an interesting inventory to observe with its many ups and downs. The Chinese language automaker is poised for sturdy progress on the again of launching two completely new manufacturers, Onvo and Firefly.
Nio can be intriguing for its resolution to push battery-swap know-how, which it provides at 1000’s of places. The thought is international to many U.S. traders, however it’s much more widespread in China. Nio just lately obtained some excellent news concerning its battery-swap ambitions — here is what you must know.
What is going on on
A battery swap is solely when somebody with an acceptable car drives a depleted battery right into a swap station, and replaces it with a completely charged battery. Nio’s latest automobiles can do that in roughly two-and-a-half minutes.
Picture supply: Nio.
Now, let’s get to the excellent news. One other Chinese language battery maker, CATL, is working with a bunch of Chinese language automakers on a battery swapping know-how that takes simply over 90 seconds. In response to Automobile Information China, 1,000 electrical car (EV) sedans with CATL’s “Choco-SEB” swappable battery have been delivered to a taxi firm — a near-perfect software for battery swaps that might restrict downtime for taxi drivers.
Why is that this excellent news?
Wait a second, is not extra battery-swap competitors a nasty factor for Nio? Completely not. Nio’s competitors is not actually different battery-swapping tech — its competitors is fast-charging stations. Nio must create an ecosystem of automobiles that use its setup to have a thriving userbase for its swapping stations, and CATL will help with this intention.
CATL is working to convey collectively a bunch of automakers to develop a standardized system for battery swaps that would vastly improve the variety of swapping automobiles on the street. Moreover, rumors are floating round that CATL is seeking to buy a controlling stake in Nio Energy’s battery swapping unit, which, relying on the potential settlement, might vastly improve the dimensions of battery-swapping know-how. CATL is already engaged on constructing out a community of its stations.
It is also seemingly that Nio’s extra reasonably priced and higher-volume model, Firefly, might herald a fleet of latest automobiles to match this new commonplace. This all sounds nice, so the place’s the disadvantage?
What is the catch?
The catch, if you wish to name it that, is that competitors with fast-charging stations is growing as firms discover methods to hurry up the method. Actually, automakers are already arduous at work to beat BYD‘s five-minute EV fast-charging benchmark. It is definitely a dangerous ambition to construct out a capital-intensive community of battery-swap stations which will solely save a couple of minutes in comparison with fast-chargers.
One other downside is that the concept of a standardized battery improvement (so many platforms of automobiles can use the identical battery-swap know-how) implies that these batteries and designs might be slower to evolve at a time when particular person firms are attempting to race forward with breakthroughs.
What all of it means
CATL, a juggernaut battery producer, approaching board to push battery-swapping networks with a number of automakers is a large deal for Nio, and that is earlier than contemplating the doorways it might open as the 2 firms develop extra ties. Moreover, if CATL does buy a controlling stake in Nio Energy’s battery-swap enterprise, it might give a younger cash-burning firm some additional capital.
Irrespective of the way you spin it, this improvement is nice information for Nio’s huge battery-swap ambitions, one of many firm’s greatest dangers.
Daniel Miller has no place in any of the shares talked about. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.
