After being pushed to the brink of bankruptcy in 2019 and bearing the brunt of the COVID-19 pandemic, electric vehicle (EV) firm Nio finally saw growth in sales this year, as well as a rise in its stock prices in July.
Now, Nio is getting ready for launching a battery-as-a-service business model in the third quarter of the year. According to chairman William Li, the firm will begin selling cars without batteries but will lease the batteries to customers through a separate company. The move is estimated to lower the cost of Nio’s vehicles by around 40%, as batteries account for a large part of EV’s production cost.
Battery swapping is not a new concept. In 2007, Israeli entrepreneur Shai Agassi founded a company called Better Place, with the aim of promoting battery swapping technology. In 2013, Tesla held an event to showcase technology that allowed cars to swap batteries in 90 seconds. Yet, battery swapping didn’t take off, with Better Place going bankrupt and Tesla stopping its program.
However, a turning point came in 2020, when China’s Ministry of Industry and Information Technology said it would step up efforts to advance the construction of battery swap infrastructure, encouraging local firms to develop the technology.
Will Nio find success with this new business model? To learn more, watch our video:
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