Nio (9866. HK), a Chinese electric car manufacturer operating at a loss, announced on Tuesday that it would collaborate with Changan Automobile (000625. SZ) to produce electric vehicles with interchangeable batteries to reduce operating expenses.
According to a statement by Nio to Reuters, the agreement will also involve Nio and state-owned Changan in constructing battery-swapping stations, sharing such stations, and standardizing batteries.
Nio is reducing its personnel and deferring long-term investments to increase efficiency and decrease costs in the face of growing competition, which began after U.S. automaker Tesla kicked off a price war at the beginning of the year. The cooperation is intended to assist Nio in enhancing its profitability, and it will do so while Nio is simultaneously doing these things.
As an alternative to putting the vehicle into a charging point, drivers can use “battery swapping,” which enables them to replace depleted battery packs with fully charged ones.
Swapping could help reduce the power network load during peak periods when drivers are recharging their vehicles’ batteries. Still, industry analysts and executives anticipate that it will only become possible if batteries become more standardized.
Nio is one of a handful of electric vehicle manufacturers counting on battery swapping as a significant power alternative for electric vehicles. The company plans to roughly triple the number of such stations in China this year.
Other manufacturers of electric vehicles claim that such facilities are prohibitively expensive and contend that the best way to alleviate users’ concerns about the range is to provide them with rapid charging technology and extended-range hybrid vehicles.
According to the data provided by the China Passenger Car Association, Changan and Nio came in seventh and eighth place, respectively, in terms of EV sales in China during the first nine months of 2018. They sold 123,322 units and 109,993 units, respectively.
Nio had 2,113 battery swapping stations in China as of the 21st of November, in addition to almost 1 million charging poles.
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