China’s Nio takes on BMW and Mercedes in domestic market with flexible battery plan

SHANGHAI (Reuters) – Chinese electric car startup Nio is seeking to capture a share of Europe’s growing electric vehicle market by rolling out a battery rental and swap network to cut costs for users, its company said. chairman at Reuters.

Nio plans to build 1,000 battery swap stations outside of China by 2025, most of them in Europe, to service the expanded range of electric vehicles it will start selling this year in Germany and other countries. markets, said Qin Lihong, who is also a co-founder of Nio. .

“We are far ahead of our competitors in terms of products and services,” Qin said in a phone interview from Germany on Tuesday.

“It’s true that there will be more electric vehicle models launching in Europe in three years, but we are also making more progress.”

Nio opened its first overseas factory in Hungary this month to manufacture energy products such as battery swapping stations, which are expensive to ship from China due to their size, Qin said.

At the heart of Nio’s decision to appeal to European car buyers is separating the battery – the most expensive EV component – from ownership to reduce upfront costs.

Nio’s battery swap stations also promise to dispatch drivers with a new, fully charged battery in just minutes, faster than current charging alternatives.

The strategy has distanced Nio from rivals in China’s EV market, but shifts costs — and risks — to the company, one of the reasons most established automakers have looked for other ways to reduce battery costs and increase charging efficiency.

Qin said Nio is also looking to partner with an asset management company in Europe to fund rental battery ownership as it begins to roll out sales this year.

In China, Nio set up a company with partners including battery giant CATL to buy the batteries for rent and then collect subscription fees from Nio users.

Nio’s revenue rose 22% in the second quarter from a year ago, while its net loss more than quadrupled to the equivalent of $410 million.

Its shares have more than tripled since its listing on the New York Stock Exchange four years ago, and the company has managed to build a fan base in China thanks to its design, pricing and reputation for concierge-like service. .

Over the past year, Nio has experimented with renting and swapping batteries in Norway for its ES8, an electric-powered SUV. The company has sold 800 SUVs and installed two exchange stations in Norway, executives said.

Qin said the experience gave the seven-year-old start-up confidence that its electric vehicle offering was “completely ahead” of electric vehicles from BMW, Mercedes and Volkswagen and ready to compete in their home market.

Nio will roll out other models in Europe, including the ET7 and ET5 sedans, starting this year.

“It’s like two runners following in their footsteps,” Qin added. “If you have a good lead, you just have to keep your own pace.”

Almost all buyers in Norway and more than half in China have opted for battery leasing, said Shen Fei, Nio’s vice president for energy management.

Nio sells the ES8 in Norway without a battery for the equivalent of just over $52,000. Buyers can pay just over $8,700 to own a 75 kWh battery. Almost all opted to pay a monthly subscription equivalent to $135, Nio said.

(Reporting by Zhang Yan, Brenda Goh; Editing by Clarence Fernandez)

Copyright 2022 Thomson Reuters.