Nio (9866. HK) and Zhejiang Geely Holding Group, two Chinese automobile manufacturers, said on Wednesday that they had inked a strategic collaboration agreement on battery swapping. The agreement stipulates that the two companies would collaborate on developing standards, technology, and models.
By entering into this agreement, Geely (GEELY.UL), a company whose brands include Volvo and Zeekr, becomes the second automobile manufacturer to form a battery-swapping cooperation with Nio, a Chinese manufacturer of electric vehicles.
To reduce expenses, Nio recently announced that it will partner with Changan Automobile (000625. SZ).
Users can swiftly replace exhausted packs with fully charged packs through battery switching, which eliminates the need for drivers to plug their vehicles into charging stations.
According to the firms, Geely and Nio will implement a “co-investment, co-construction, shared, co-operative” approach.
In addition, the firms stated that they would work toward establishing an effective mechanism for managing battery assets, constructing a unified battery swap operation, and developing battery-swappable cars compatible with each other’s battery swap systems.
To increase its profitability, Nio has been working. Since U.S. automaker Tesla (TSLA.O) began a pricing war at the beginning of the year, it has reduced its staff and postponed long-term investments to enhance efficiency and decrease costs. This is in response to the rising competition that it has been facing.
During peak periods, when drivers are recharging their batteries, battery swapping might reduce the load on power networks. However, industry experts and executives anticipate that this would only become possible if batteries were to become more standardized.
Among the few electric vehicle manufacturers counting on battery swapping as a critical power alternative for electric vehicles, Nio is one of the few companies with a goal to nearly triple the number of such stations in China this year.
Geely pledged in 2021 that it would establish 5,000 battery-changing facilities for electric vehicles worldwide by 2025.
According to Geely, the company presently has 300 operational stations and will continue to create stations independently and in collaboration with Nio.
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