On November 21, NIO (NIO: NY) officially announced that Changan Automobile has become the first power swap partner open to the public. It is reported that NIO and Changan will jointly develop a power-swap model, and the first power-swap model with a shared battery pack is scheduled to hit the market in 2025.
Throughout the entire new energy vehicle market, NIO is the only car company that has commercialized power-swapping technology on a large scale. However, the heavy investment in assets has also backfired on NIO's financial situation, and is one of the reasons for its significant losses over the years. As a result, NIO has been criticized for this model. In fact, Li Bin, founder and CEO of NIO, in his internal staff speech on the 20th, he made a "dramatic" on the power swap cooperation. According to his disclosure, NIO is also in cooperation with 4-5 car companies to discuss.
It is reported that Changan Automobile and NIO signed a cooperation agreement on power swap business, and the two sides will cooperate in promoting the establishment of power swap battery standards, the construction and sharing of power swap networks, the research and development of power swap models, and the establishment of an efficient battery asset management mechanism. Li Bin revealed in the official community of NIO that the external sharing is the next generation of super-charging and quick-swap battery packs for the mass market.
On November 20, in the internal speech of the whole staff, in response to the question raised by the staff of whether the power swap business is sustainable operation, Li Bin made a positive response. Li Bin expressed that the road of power swap can be very difficult, but it is the right thing to do, "people imagine the power swap as in 2003 when Amazon wants to do cloud services, like Alibaba, Tencent, Amazon, Microsoft, they had lost money for many years before finally realizing success." He believed that power swap can be a huge first-mover advantage for Azure, and the time has come to open it up to the whole industry, "the first partner of Azure will be announced tomorrow." As early as in April this year, at the China Electric Vehicle Association Forum, Li Bin indicated that, "power swap service to the stage of foreign output," hoping that other companies can share with Azure, building charging and swapping infrastructure, and revealed that there have been car companies in the matter of discussions with Azure.
Nevertheless, NIO's proud "power swap mode" has also been criticized by the market. The market has long questioned NIO's insistence on the power swap model, mainly because of the investment cost of the power swap station. A research report by China Post Securities has analyzed the investment cost of NIO's power swap station, mentioning that the second generation station, for example, has an equipment investment of about CNY 1.5 million, a battery investment of up to CNY 1 million (13 75kwh or 100kwh batteries), power costs (assuming 30 daily services), rent costs and labor costs totaling CNY 1 million, and the total cost of the above is about CNY 3.5 million (the cost of the first generation station is about CNY 3.46 million). The total cost of the above is about USD 3.5 million (the cost of one generation of station is about USD 3.46 million ).
According to the official disclosure, as of November 20, the cumulative layout of NIO's nationwide power swap stations amounted to 2,103, with 798 new stations added this year. According to the plan, this year, NIO will accumulate 2,300 power stations. Based on this initial calculation, the investment of the 2,103 power stations laid out by NIO is about CNY 7.36 billion. The rigid expenditure of huge fixed assets at the initial stage will undoubtedly test NIO's financial situation. As of the middle of this year, NIO's fixed assets ending balance reached CNY 18.548 billion, the highest among NIO, Xpeng, and Li Auto.
Huge fixed assets indicates that the high amount of depreciation will erode the company's profits. In the first half of 2023, the NIO net net profit is still a loss of CNY 10.926 billion. The construction of service system centered on power swap is also regarded as one of the important reasons for NIO's loss.
However, in the conference call after the disclosure of the interim report, NIO has illustrated that after the adjustment of user rights and interests, the proportion of paid power swap is improving. Now the power swap each time to charge CNY 30-50 service fee. The company revealed that about 60 power swaps per day at the third-generation station can reach break-even, and about 20% of the power swap stations have now reached this level. As of November 20, NIO has provided users with more than 32 million power swaps in total. Moreover, the main body of management of NIO's power swap stations has been shifted from car companies to battery asset management companies. As early as 2021, NIO joined hands with CATL, Guotai Junan and Hubei Science and Technology Investment Group to set up a battery asset management company (Azure Energy), which undertakes the operation and management of the power swap station and the recycling of used batteries.
power swap standards are expected to converge, undoubtedly injecting a shot in the arm for the industry. Currently the main players in passenger car power swap include CATL, Geely, SAIC, and NIO, while the four differ significantly in technologies.
For power swap, CATL has proposed that the ultimate solution for 80,000-120,000 models is its "chocolate power swap". The so-called chocolate power swap, that is, the use of CATL CTP technology, a single battery can provide a range of about 200 kilometers, can be adapted to 80% of the world's already on the market, and in the next three years to be listed in the development of pure electric platform models. CATL has also launched EVOGO, a brand of power-swapping service, which requires only three parking spaces for each standard station, and can store 48 power-swapping blocks in the station, with a single block taking about one minute to switch to a new one.
As for Geely, in 2021, Geely will integrate Lifan Technology and set up a new joint venture, Ruilan Automobile, focusing on power swap models and services. On the strategy of power swap, RuiLan Automobile is to take the B-end market as the main starting point first, and then expand to the C-end. It is reported that RuiLan's power swap station covers an area of about 4 parking spaces, can store 27-39 batteries, the number of daily service 278-400 times, a single power swap time of 1.5 minutes.
As for SAIC, in August this year, its Feifan Automobile released the Feifan three electric technology system, also synchronized with the official launch of the Feifan power swap Beijing first station.
In addition, in terms of models, in addition to NIO, FAW Hongqi will launch the first batch of E-QM5 in November 2021, and the new EH7, which offers a variety of options for recharging and swapping, will also usher in the SOP off the production line in the near future. It can be foreseen that with more and more power-swap models on the market, Red Flag's demand for power-swap stations will greatly increase.
As of press time, NIO closed at USD 7.40 apiece, with a market capitalization of USD12.5 billion.