- Chinese electric vehicle maker Nio on Thursday announced plans for a “battery-as-a-service” option with its cars.
- The company will allow buyers to lease their batteries for around $ 150 per month, which will lower the purchase price of the car.
- Customers will have access to battery swap locations and chargers across China, Nio said.
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Nio, a Chinese electric automaker, has a new pricing structure for its cars and charging network that could help lower initial costs for buyers as it battles to take on Tesla.
The company calls its new program “battery-as-a-service,” a subscription model that allows customers to purchase their vehicle as usual while leasing the battery for smaller monthly payments of around $ 150 per month. Nio’s ES6 SUV will now start at around $ 40,000, barely more than Tesla’s Model 3 sedan.
“To date, Nio has deployed 143 battery swap stations in 64 cities in China and performed over 800,000 battery swaps for our users,” CEO William Bin Li said in a press release. “The benefits of our rechargeable, exchangeable and scalable battery exchange technologies will continue to improve the competitiveness of Nio products, promote the conversion to our high-end smart EVs and create more value for our users. ”
If the move becomes an industry-wide trend, analysts believe it could help lower the barrier to entry for electric vehicles, which remain much more expensive than their internal combustion counterparts on average.
Thursday’s announcement was accompanied by news that the battery swap program will be made possible by a new joint venture of Nio and outside investors, including battery maker CATL and a government-backed group.
“A recent injection of capital creates an atypical ownership structure,” Piper Sandler analyst Alexander Potter told clients earlier in August after the company received funding from a local government. “But cash is cash, and with a fortified balance sheet and a well-established brand, we believe Nio has a chance to earn the nickname ‘Tesla of China’. ”
Nio delivered 10,331 vehicles in the second quarter, he said on July 2. That’s triple from last year over the same period, but well below Tesla’s 90,650 worldwide. (Tesla does not divide some countries.)
Nio shares are up around 222% year-to-date and the company plans to launch in Europe in 2021.