Nio Ltd. is one of the most promising of the new electric vehicle (EV) companies in the world, and its valuations and recent gains on stock markets are reinforcing the belief in the industry and world. The company, co-founded by Chairman Willam Li and Jack Cheng, is taking one of the more comprehensive approaches to the entire EV user experience with what it calls its comprehensive Nio Power strategy.
One of the main components of the effort is the innovative battery-as-a-service (BaaS) subscription model it announced in August. The BaaS model allows users to purchase its EVs and subscribe to the usage of battery packs separately. If a user purchases one of the company’s ES8, ES6, or EC6 models and subscribes to a 70-kW·h battery pack under the BaaS model, they get a vehicle purchase price deduction of RMB70,000 (about $10,300) in exchange for paying a monthly battery-pack subscription fee of RMB980 ($150). In addition, the user still has access to existing favorable policies such as purchase tax exemption and government subsidies for EVs.
The first vehicle under the BaaS model in China has recently completed the process of license plate registration, insurance purchase, and auto financing, and all users who purchase Nio vehicles are now eligible to place orders with the BaaS model.
This novel concept is thought to be so promising in China that, also in August, Guotai Junan International Holdings Ltd. joined with Nio and Contemporary Amperex Technology Co., Ltd. (CATL) and Hubei Science Technology Investment Group Co., Ltd. (HBSTI) to jointly boost the innovation and development of the “new energy vehicle” battery concept. The four partners will support Wuhan Weineng Battery Asset Co., Ltd. (Weineng) to promote the development of “car-and-battery separation,” launching a broader BaaS industry initiative that includes car-and-battery separation, battery rental, and other rechargeable services. Weineng is planning to expand its business to all electrical vehicle brands.
Back to Nio, Ganesh Iyer, the Managing Director for Nio USA operations and Nio’s global CIO, gave a keynote on the holistic Nio Power strategy at the end of November for Wards Intelligence and recently posted it on its blog and on YouTube.
He says that EVs account for only 3% of passenger car globally, and that research shows that the main impediment to broader EV adoption is centered around the battery. The high price of EVs is largely contributed by a very expensive battery pack.
“Roughly about 25% of the cost of the EV is for the battery pack itself,” said Iyer.
An EV’s residual value is also hit by concerns of battery degradation.
He and his company to address these challenges, driving more EV adoption and more users from the internal combustion engine, by developing the unique Nio Power solution, which involves battery charging and swapping as well as upgrading an end-to-end power service system.
He described the thinking around the BaaS service announced in August.
“It allows the users to purchase new vehicles and subscribe to the usage of the battery pack as two separate transactions,” he said. The battery separation, and “the chargeable, swappable, and upgradable infrastructure utilization” help to reassure the car ownership as well as better resale value for our users.”
The BaaS business model was made possible because of innovations around Nio Power. The Power Cloud backbone encompasses parking space (Power Home 2.0 and Power Home Plus chargers); do-it-yourself (the app, Power Swap, and Power Charger–Nio’s “Supercharger” network), and one-click-for-power (the service specialist and Power Mobile). Nio Power is backed by the company’s power grid, a combination of multiple power replenishment services “all centered around the user experience,” for chargeable, swappable, and upgradable smart power. The entire end-to-end power solution is made possible by a four-component backbone: OSS high-performance IOT; Athena smart simulation; Grid smart route planning; and Shield battery management.
Nio recently upgraded its Power Home chargers to 2.0, the new design winning a prestigious Red Dot award in 2020. The company has installed a little over 35,000 chargers for new users. At the 2020 Beijing Motor Show, it announced a fast DC charger that is about three times more powerful at 20 kW vs the 7 kW AC charger. For reference, a 100-kW·h battery pack using the 20 kW unit can fully charge in 3.5 h compared to 10 h.
The company’s Power Charge public-charging solution has been mainly installed in the busiest user locations. As of the end of September, there were about 54 Power Charger stations, with 350 single chargers, throughout mainland China connecting the highways and four major cities of Guangzhou, Beijing, Shenzhen, and Shanghai. An IoT system connects users to service personnel, home chargers, and public charging facilities. When a user plans a trip with the Nio app, it will recommend the charging route.
On an interesting side note, more than half of Nio’s charging map users are non-Nio owners, meaning owners of other EV brands, because the company wants to drive more users to EV adoption. The same is true for its one-click-for-power mobile charger, which is also being offered to owners of other EV brands (like Tesla). A 10 min charge by the mobile van gives about a 100-km (62 mi) range boost.
However, Nio’s power replenishment story is headlined by its battery Power Swap stations. The company calls it the world’s first battery swap technology of its kind. It is enabled by over 1200 patents. The fully automatic battery swap can take 3 minutes, faster than liquid refueling. It includes automatic battery and electric system checks. A compact modular design enables the smallest power swap station in the world, taking up only three parking spaces.
Every battery removed from a car at the company’s swap stations is carefully examined by a qualified technician to make sure that it is completely safe and there are no performance issues with it. If OK, the removed battery is fully charged and put back in the rotation for the next Nio vehicle for swapping. If faulty, the battery is taken out of rotation and sent for repair before it is put back into the system.
In November, Nio announced the launch of its 100 kW·h battery with battery upgrade plans. With over 300 patents filed and gained, the new pack features CTP (cell to pack) technology for 37% higher energy density. Powered by the 100 kW·h battery, the NEDC range of Nio models can now reach up to 615 km (382 mi). Users of the 70-kW·h battery pack can choose to either purchase the new battery for a permanent upgrade, or flexibly upgrade to it for RMB880 per month or RMB7980 per year.
Nio has over 157 battery swap locations in 65 cities throughout mainland China, in Tier One cities like Shanghai, Beijing, Shenzen, and Guangzhou, and some of the Tier Two cities along highways connecting cities. And those numbers are growing, Nio pledging to install stations near where new users live.
The company recently completed its one millionth battery swap.
“We are a global company, and China is where we started, and that is our first market,” concluded Iyer. “In the near future, we will expand our footprint to more places around the world.”
Look out world!
Read more about Nio from Futurride:
