Chinas Nio said on Tuesday it would partner with Changan Automobile (000625. SZ) to jointly develop battery-swapping electric vehicles in an attempt by the loss-making Chinese EV maker to ease costs. The joint venture will establish battery swap standards, build and share battery-swapping stations, standardize batteries, and engage in R&D of battery-swap-enabled vehicle models. The company told Reuters that it will also set up an efficient battery asset management system.
They added that the partnership will initially focus on the Changan Tiago EV, which is slated for launch this year, and other Changan models in the future. Both companies will also work together on building battery-swapping stations and promoting the model. The companies also plan to work with the local governments of Hainan and other cities to promote the technology, the statement said.
Battery swapping is a form of electric vehicle ownership that allows drivers to switch out their old, depleted batteries with fresh ones in minutes, at a station, or at home. It offers more range than charging, a more straightforward driving experience, the possibility of lower purchase prices, easier upgrades, and lower operating costs.
With a history of partnering with foreign car makers, Changan was excited about the project and planned to help its customers benefit from the technology. The company said it will also work with other automakers to explore this technology.
While premium EVs like the Nio E-Vehicle and the Tesla Model S are popular, battery swapping is still a new technology. It takes an average of 1506 days to swap a battery for the first time and just 273 days to reach the following 10 million swaps, according to Nio. The company is also expanding its network of battery-swapping stations globally.
Other EV makers, including SAIC’s Roewe, MG, and Maxus brands, and GAC Aion and BAIC BJEV, have their battery-swapping networks. However, many of them are still in the early stages and have only a small number of stations in tier-one cities.
The cooperation between Changan and Nio will allow them to accelerate the development of this new technology and help them achieve a faster scale, the companies said in the statement. It will also enable them to take advantage of government subsidies for the battery-swapping business, which is intended to boost new energy automobile sales. The partnership comes as Changan struggles and needs help to improve profitability, as it trims its workforce and defers long-term investments in new projects. It sold 1,130,884 passenger cars in January-October, ranking seventh in China. This was below market leaders BYD and FAW-Volkswagen. It is also behind domestic rivals such as Geely and Dongfeng. The companies added that the partners also aim to expand the sales and service networks for their respective EV models. They will set up a joint service center in Chongqing to support the development of this new technology. This will include training, maintenance, and service personnel in the region.