Today, cnTechPost reported that NIO (NYSE:NIO) is planning to set up a battery asset management company in August. This move is part of the company’s plan to separate its vehicle and battery units, and should enable NIO to launch a battery-as-a-service (or BaaS) offering. The new company will be led by NIO Energy.
NIO’s battery swap technology
Currently, NIO offers battery swap technology as part of its broader BaaS strategy. This offering allows users to replace their empty batteries for charged ones, eliminating the time needed for charging. The service is currently free for NIO users.
NIO announced in May that it had completed 500,000 battery swaps. This news boosted the company’s and market participants’ confidence that the technology could work.
NIO’s vision of renting batteries as an individual asset
In January, NIO chairman William Li said, “We consider that the separating consumption of vehicles and batteries based on battery swapping can benefit users through using battery packs that are chargeable, replaceable, updatable and recyclable. Battery will be rented to users an individual asset.”
With time, the initiative should do away with the need of owning a battery. Under the BaaS service, NIO plans to sell cars with the option of not owning the battery. Consumers may also opt to rent batteries, reducing their initial investment in owning a car. The option could also help them stay up to date with improvements in battery technology.
Financing for NIO’s battery asset management company
NIO is currently seeking financing for the company, and could bring in investments from large energy funds. cnTechPost reports that Contemporary Amperex Technology may be interested in investing in the initiative.
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