- On Thursday, Chinese electric vehicle maker Nio announced plans for a “battery as a service” option with its cars.
- The company will let buyers lease their batteries for about $150 per month, lowering the purchase price of the car.
- Customers will have access to battery-swap locations and chargers throughout China, Nio said.
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Nio, a Chinese electric automaker, has a new pricing structure for its cars and charging network that could help lower initial costs for buyers as it fights to take on Tesla.
The company’s calling its new scheme “battery as a service,” a subscription model allows customers to buy their vehicle as usual while leasing the battery for smaller monthly payments of about $150 per month. Nio’s ES6 SUV will now start at about $40,000, only slightly more than Tesla’s Model 3 sedan.
“As of today, Nio has deployed 143 battery swap stations across 64 cities in China, and completed over 800,000 battery swaps for our users,” CEO William Bin Li said in a press release. “The advantages of our chargeable, swappable and upgradable battery swap technologies will continue to enhance competitiveness of Nio products, promote conversion to our premium smart EVs and create more values for our users.”
If the move becomes an industry-wide trend, analysts say it could help lower the barrier to entry for electric vehicles, which remain much more expensive than their internal-combustion counterparts on average.
Thursday’s announcement was accompanied by news that the battery-swap program will be made possible by a new joint venture by Nio and outside investors, including battery maker CATL and a government-backed group.
“A recent capital infusion makes for an atypical ownership 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 fortified balance sheet and a well-established brand, we think Nio has a shot at earning the ‘Tesla of China’ moniker.”
Nio delivered 10,331 vehicles in the second quarter, it said on July 2. That’s triple last year in the same period, but well short of Tesla’s 90,650 worldwide. (Tesla does not breakout specific countries.)
Shares of Nio are up roughly 222% since the beginning of the year, and the company has plans to launch in Europe in 2021.