NIO Stock Rises After CATL Signs EV Battery Swap Agreement

Takeaways

• NIO has signed a battery swapping contract with Contemporary Amperex Technology, (CATL), to help EV drivers power up faster.
• The Chinese EV maker said the deal would "provide efficient recharging solutions for users."
• The financial considerations are not disclosed.

Shares of NIO (NIO), a U.S.-listed company, advanced on Tuesday after the electric car (EV) maker and Contemporary Amperex Technology or CATL, the world’s leading battery manufacturer, agreed to create a battery exchange network in China to assist drivers to avoid recharging delays.

NIO said the deal between the two China-based firms would benefit passenger vehicles over a wide range of products, "unifying industry technical standards, enhancing capital and business collaboration, and providing efficient recharging solutions for users." It added that the collaboration will "create the largest and most advanced battery swapping service network for passenger vehicles, leveraging their respective strengths in technology, management, platforms, and brand influence."

Battery swapping allows drivers to replace their depleted batteries with fully charged ones, eliminating the need for them to spend time at charging stations.

NIO and CATL also plan to pursue capital co-operation. Financial considerations have not been disclosed.

NIO CEO Calls Agreement 'Pivotal Moment' for Battery Swapping

NIO CEO William Li called the agreement "a pivotal moment" that will propel battery swapping "into a brand-new phase." Li explained that by working with CATL, "NIO's swapping network will extend to more regions and provide better services" and facilitates "mutual empowerment in technological standards and service systems."

NIO noted that it continues to expand its power swap network, anticipating that by the end of the year, it will cover "more than 2,300 county-level divisions in 27 provincial-level administrative regions."

The shares of NIO listed in the United States, which gained 1.5% recently after a recent gain of 1.5% and then pared the gains immediately afterwards, are down almost 10% over the past year.