- On Thursday, the Chinese manufacturer of electric cars announced Nine plans for an option “battery as service” with their cars.
- The company lets buyers charge their batteries for about $ 150 a month, which lowers the purchase price of the car.
- Customers will have access to locations and chargers with batteries throughout China, Nio said.
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Nio, a Chinese electric car manufacturer, has a new pricing structure for its cars and charging network that could help lower start-up costs for buyers as it struggles to take on Tesla.
The company calls its new scheme “battery as service”, with a subscription model allowing customers to buy their car 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, only slightly more than Tesla’s Model 3 sedan.
“As of today, Nio has deployed 143 battery exchange stations in 64 cities in China, and completed more than 800,000 battery swaps for our users,” CEO William Bin Li said in a press release. “The benefits of our rechargeable, interchangeable and rechargeable battery replacement technologies will continue to enhance the competitiveness of Nio products, promote conversion to our premium smart EVs and create more value for our users.”
If the move becomes a sector-wide trend, analysts say it could help lower the barrier to entry for electric cars, which remain on average much more expensive than their inter-industry peers on average.
Thursday’s announcement was accompanied by news that the battery swap program will be made possible by a new joint venture by Nine and outside investors, including battery maker CATL and a government-backed group.
“A recent capital infusion is causing an atypical property 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 strengthened balance sheet and a well-established market, we think Nio has a shot at earning the moniker ‘Tesla of China’.”
Nine delivered 10,331 cars in the second quarter, it said on July 2nd. That is three times last year in the same period, but well short of Tesla’s 90,650 worldwide. (Tesla does not break out specific countries.)
Shares of Nio have risen roughly 222% since the beginning of the year, and the company plans to launch in Europe in 2021.
