China electric car startup Nio has officially launched its electric car battery-swapping service, giving drivers who take up the service a RMB 70,000 ($A14,500) discount off the sticker price.
Instead of the upfront cost of the battery, drivers buying one of Nio’s handful of smart and sleek electric cars who take up the “battery-as-a-service” (BaaS) option will pay a RMB 980 (about $A198) monthly fee that includes a 70kWh battery.
In return, they benefit from the ability to change a depleted EV battery for a charged-up one in a matter of minutes – a boon for those who are after the convenience of not having to wait for a battery to recharge, such as on a long distance trip.
Based on its “Power Swap” battery service, of which it has already conducted more than 800,000 swaps at its 143 battery swapping stations across China, the Nio BaaS is now made possible by the approval of a national electric vehicle battery swapping standard.
Nio says it played a major role in the creation of the battery swapping standard along with China Automotive Technology & Research Center (CATARC) and multiple other car makers.
A number of battery makers have teamed up with Nio to develop the battery-swapping technology, including CATL (or Contemporary Amperex Technology Co. Ltd, which is also a Tesla battery partner), Hubei Science Technology Investment Group Co., Ltd. and Guotai Junan International Holdings Limited.
Nio is often referred to as a “Tesla rival” (and in more amplified circles a “Tesla killer”), and with a small stable of sophisticated, long-range electric vehicles with a focus on good design and high end tech this is worthy of debate.
Nio has appeared on the investment radar of Australians in recent times, becoming the most traded share in July above Tesla, according to online trading platform eToro as traders look to emulate the Tesla investment experience (which has this week soared about $US2,000 per share preceding a five-to-one stock split).
But its main distinction to the Californian EV pioneer is its battery swapping service (it has 1,200 patents for the technology), which the company says helps consumers find the sweet spot between a high priced EV and the low running cost of an EV.
Although EVs demand a premium price due to the cost of batteries, their total cost of ownership is typically much lower than a combustion engine car, thanks to a more efficient drivetrain, less wear and tear from vibrations and reduced wear on brakes.
Nio’s approach seeks to defray the high price of buying an EV, by splitting apart the cost of the car from that of the battery.
Nio says that by subtracting the battery price from the purchase cost of the car, then metering that cost out in a subscription form, it is actually offering a lower purchase price and lower running cost than a combustion engine equivalent to its customers.
Those who don’t take up the BaaS option will cop a RMB 80 (about $A16) “battery guarantee” fee per month, presumably because if these batteries are not returned regularly to the manufacturer, it cannot keep a close eye on battery state of health, thereby extending the life of a battery.
Nio says its BaaS “represents a systematic solution to the long-existing challenges for EV penetration, including battery degradation, battery upgradability, and lower resale value.”
Bridie Schmidt is lead reporter for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model 3 and has it available for hire on evee.com.au.