Chinese electric vehicle (EV) maker NIO [NIO:US] and state-owned oil enterprise Sinopec [SNP:US] signed a strategic collaboration agreement on April 15 to build EV battery swapping stations across the country, as reported by Caixin on April 16. NIO plans to accelerate the establishment of its EV battery swapping stations by leveraging Sinopec’s over 30,000 refueling stations nationwide. Li Bin, the founder of NIO, said that the firm would have 500 battery exchange stations by the end of 2021, while by April 14, the figure was 200. This means NIO need to build 300 more stations by the end of this year. In addition to the business layout of battery charging and swapping stations, the two parties would also collaborate in new materials, smart EVs, and Battery-As-A-Service (BaaS).
NIO regards the battery swapping business as one of its core business modes. NIO introduced a separation model for vehicles and batteries, and let the establishment of Wuhan Weineng Battery Asset as the management and operator of batteries. Thus, consumers can simply buy bare cars while leasing batteries from the operating company. This method could also help solve the problem of EVs’ low residual values due to a high battery loss.
Battery swapping is another recharging method of EVs, different from recharging the batteries equipped on the EVs at the charging stations. In the battery exchange mode, the station will directly replace the battery in an EV with a fully charged battery. There are advantages and disadvantages with both charging and swapping methods. The charging time is always a problem for the charging method, though the Tesla [TSLA:US] Supercharger V3 under the highest charging efficiency can reach a 250km driving range with a 15-minute charging. However, the use of ultra-high-power charging piles often causes irreversible damage to the battery. The swapping mode can greatly reduce the recharging time required, while the cost of battery swapping is too high. Currently, the cost of building a battery swapping station is about RMB5m. In addition, the battery specifications are difficult to unify for the exchange. Despite this, to supporting the further development of the domestic new energy vehicle (NEV) industry, in 2020, the Government Work Report of the National Two Sessions included NEV battery charging and swapping stations into the new infrastructure category.