Chinese electric car manufacturer Nio is betting that even after its American rivals avoid expensive technology, battery replacement will still play a key role in its challenge to Tesla in the world’s largest car market. Battery replacement allows the driver to quickly replace a depleted battery with a fully charged battery at a specially equipped repair station. In April of this year, NIO, which was listed in New York, cooperated with the state-owned oil group Sinopec. As part of the plan, the company will more than double its network of such gas stations in China this year to 500. NIO also plans to open a battery exchange station in Norway this year as part of its expansion to Europe. Shen Fei, vice president of power management of NIO Automotive, told the Financial Times: “Many users tell us that changing the battery is the reason they choose this car.”
NIO is one of several Chinese automakers trying to challenge Tesla’s leading position in the country’s high-end electric vehicle market. The American group has recently faced tremendous pressure in China because its poor handling of high-profile customer protests has turned into a propaganda nightmare. New York-listed NIO and Sinopec, the state-owned oil group, have cooperated as part of a plan to more than double its network of such gas stations in China this year to 500. © Nio China (Nio China) is the largest battery-powered and hybrid vehicle market in the industry dedicated to developing infrastructure to support home and station charging. Geely is China’s largest-selling private car manufacturer. The company plans to build 100 interchange stations in the southern city of Chongqing this year, and then promote the facilities in other parts of the country.
Beijing New Energy Vehicles, a subsidiary of state-owned automaker Baic Motors, is targeting fleets of electric taxis and operating 121 interchange stations. Regardless of whether this is the ultimate goal of the industry, Chinese automakers now want to win Shenfei and Weilai. In recent years, global interest in battery replacement has diminished, partly because of the high cost. In the case of customer dissatisfaction, Tesla ended a two-year trial of its own exchange system in 2015. This technology benefits from Beijing’s strong support. Last year, the government set a requirement for subsidies for electric vehicles priced at RMB 300,000 or more on battery swaps, a move that benefited Neo. The attractiveness of battery replacement to drivers is that it can reduce upfront costs. Nio introduced a battery ordering option last year that allows customers to buy cars without power supplies, thereby reducing the purchase price by $10,000.
Taking into account the overall operating costs and the potential to charge multiple cars at the same time, although slower than battery replacement, Tesla and other companies are more efficient. Twice a week newsletter Energy is an essential business in the world, and energy is a newsletter. Every Tuesday and Thursday, Energy Source will send it directly to your inbox, bringing you important news, forward-looking analysis and internal intelligence. Register here. Edison Yu, an analyst at Deutsche Bank, said that whether Neo and other companies can make battery replacement profitable depends on the utilization of stations and the ability to reduce operating costs through automation. Nio was founded in 2014 and has been working hard to establish a battery exchange infrastructure. The cash flow crisis in 2019 means that it is far behind the early goal of establishing 1,100 exchanges by 2020. After receiving a state-backed investment of US$989 million early last year, the group resumed its expansion efforts.