As EV competition increases in line with rising demand, companies are seeking alternate marketing strategies that are aimed at the general barriers to widespread adoption. Battery charging is one of the pivotal facets of EVs that is still surrounded by ambiguity and doubt; normally both attested to unknown, extra costs. EVs are already an expense, some might even deem them a luxury; hence dealing with these issues at the very foundations could be a surefire way of changing the minds of unconverted drivers.
Battery-swapping is a relatively new technology that has the potential to completely flip the script on EV logistics. Instead of waiting for extended periods of time to recharge the vehicle battery through traditional ‘fast-charging’ methods, the battery-swap method takes no longer than 5 minutes; completely eradicating the time and range worries that have plagued the growth of EVs since their inception.
Nio (NASDAQ: NIO), an industry leader in the Chinese market, announced today that the company is in talks with various European carmakers about licensing its unique battery-swapping technology in a bid to win over the psyche of petrol and diesel drivers. The company hopes to expand its existing 800 charging stations to 5,000 by the middle of the decade and hopes to have 1,000 swapping stations outside of China by 2025.
If Nio is able to sell its technology across Europe and then the US, it could revolutionize the current image of EVs as unaffordable and inefficient. With the battery making up a third of the cost of the vehicle, and a charging time of just 5 minutes; the market could completely change.
What does this mean for Nio? Well, it seems the company is going for a bottom-up approach to EV exposure, rather than targeting specific Nio customers. By targeting the downfalls of the entire market itself, the company hopes that these drastic changes will spark the needed snowball effect that is imperative to open up the global market, and in turn, Nio sales.
Also, a significant amount of EVs is sold through finance companies, which are currently uncertain about the health of car battery after 3 years. By removing this from the cost; suddenly it becomes a lot easier to own. The company hasn’t disclosed any revenue details regarding the swapping stations, with some suggesting that the company will probably lose money from the service – will it be worth it? We will have to see.
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Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.