The recent Dragon Year Spring Festival not only tested the transportation capacity but also examined the new energy vehicle recharging services. This time, battery swapping has become a focal point of attention.
On February 20th, NIO released the "NIO User 2024 Spring Festival Travel Report," which revealed that during the Spring Festival period from February 8th to February 18th, 2024, NIO provided a total of 871,477 battery swapping services for users, with a peak of 90,199 swaps in a single day, marking a 44.65% increase compared to the previous year. Among them, the number of swaps at high-speed swapping stations surged, providing a total of 308,646 swaps, an average increase of 11,420 swaps per day compared to last year's Spring Festival, saving users approximately 9,260,000 CNY in service fees.
Furthermore, thanks to the increase in the number of NIO's high-speed highway swapping stations, the queuing time for NIO users at these stations significantly reduced during the Spring Festival period. From ordering to completing the swap, it now takes an average of 10 minutes and 31 seconds for users to fully recharge and depart, a decrease of 6 minutes and 26 seconds compared to last year's Spring Festival. Swapping batteries has gradually become more convenient than refueling.
Industry insiders pointed out that compared to last year's Spring Festival data, NIO's battery swapping was more widely applied this year, and the efficiency of swapping also improved. On one hand, with the increase in the number of NIO vehicles and swapping station deployments, more people are choosing battery swapping as their preferred recharging option after experiencing the "fully charged in three minutes" feature. On the other hand, the current national policies clearly support the development of battery swapping. The industry and capital are increasingly favoring the battery swapping model, providing NIO's battery swapping with greater development space and accelerating the industry's popularity of battery swapping.
Why is the government frequently mentioning battery swapping?
The once controversial battery swapping model has now received support from various national policies.
Looking at the development policies for new energy vehicles over the past three years, it's evident that battery swapping has risen to a strategic level. Important documents such as the "Development Plan for the New Energy Vehicle Industry (2021-2035)," the "Implementation Opinions on Further Enhancing the Service Guarantee Capacity of Charging and Swapping Infrastructure," and the "Notice on Initiating Pilot Projects for the Application of New Energy Vehicle Battery Swapping Models" have all proposed promoting the construction of battery swapping networks and standard systems, encouraging the promotion and application of battery swapping models, promoting the formulation of standards for on-board battery swapping systems, universal swapping platforms, and battery packs, to maximize resource efficiency.
In June 2023, the Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology jointly issued the "Announcement on Extending and Optimizing the Policy of Vehicle Purchase Tax Exemption for New Energy Vehicles," directly reducing the threshold for purchasing battery swapping models. According to this policy, when the seller sells new energy vehicles with a "swapping mode," the sales amount is separately calculated for the new energy vehicle without the power battery, and separate invoices are issued. The untaxed price stated on the uniform sales invoice obtained by the purchaser for the purchase of new energy vehicles without power batteries is used as the taxable price for vehicle purchase tax calculation.
At the National Industrial and Information Work Conference held in December 2023, the Ministry of Industry and Information Technology once again explicitly expressed its support for the development of the battery swapping model.
Just a month later, the Ministry of Industry and Information Technology, together with other ministries such as the National Development and Reform Commission and the National Energy Administration, issued the "Implementation Opinions on Strengthening the Integration and Interaction of New Energy Vehicles and the Power Grid," proposing to establish preliminary technical standards for vehicle-grid interaction by 2025, fully implement and optimize peak-valley electricity prices for charging, and achieve large-scale application of vehicle-grid interaction by 2030.
In the industry's view, the release of these opinions is of great significance, indicating that the country not only vigorously promotes new energy vehicles but also considers the safe and stable operation of the power system. In practical applications, NIO's battery swapping has already demonstrated strong integration with the power grid. It is reported that NIO's swapping stations have energy storage capabilities, which can not only efficiently recharge but also regulate the grid by peak shaving and valley filling, avoiding waste of electricity resources. Compared to high-voltage fast charging, the pressure on the grid from the battery swapping model is smaller.
With the government's policies providing strong guidance for industry development, the new energy vehicle industry is no exception. From last year to this year, many leading enterprises have actively entered the field of battery swapping, aiming to seize early opportunities.
On January 26th, CATL announced that it would officially establish a joint venture company with Didi to provide battery swapping services for new energy vehicles in the ride-hailing scene. Faced with the increasingly fierce competition in the power battery field, CATL began to focus on battery swapping and energy storage. The cooperation between CATL and Didi has further drawn public attention to the development of battery swapping.
Meanwhile, state-owned and private enterprises, as well as industry giants, have chosen to cooperate with NIO to ensure that they establish a foothold in the battery swapping field as soon as possible. The "Battery Swapping Alliance" has officially emerged.
In November 2023, Changan and Geely successively announced that they would cooperate with NIO in battery swapping, conducting comprehensive cooperation in areas such as battery swapping standards, technology, network construction and operation, and vehicle development.
On January 11th of this year, Jianghuai and Chery reached strategic cooperation agreements with NIO on battery swapping, engaging in cooperation in multiple areas such as battery swapping standards, technology, network construction, and establishing efficient battery asset management mechanisms. Jianghuai also plans to deepen cooperation with NIO in future planned new energy vehicle models, launching "chargeable, swappable, and upgradable" models to enhance the overall user charging experience.
The choice of automakers to cooperate with NIO is a pragmatic layout in response to policy calls. Battery swapping construction requires higher technical accumulation from automakers and involves considerable cost. Instead of individually building their own infrastructure, it's better to cooperate with NIO to quickly establish a layout through technological leverage. This is also due to NIO's leading technology in the field of battery swapping.
Public information shows that as early as 2020, the National Energy Administration issued battery swapping industry standards in which NIO took the lead in formulating three standards: 10435, 10436, and 33025, and participated deeply in the formulation of standards 10434 and 33004. After several years of development, NIO has now obtained more than 1600 patents related to battery swapping. In terms of battery swapping layout and operation, NIO has established a feasible model in terms of technical standards, operation modes, and expansion forms.
Entering the battery swapping arena: How top capital players are involved
Policy support, industry optimism, and the participation of peers have made the commercial value of battery swapping increasingly apparent, attracting widespread attention from capital, including state-owned assets. On January 11th, Wanxiang Group, Anhui Provincial Communications Holding Group, and NIO signed a strategic cooperation agreement in Hefei titled "Strategic Cooperation Agreement on Jointly Promoting the Construction of Open and Shared Energy Storage and Charging Exchange System." On the same day, Zhongan Energy was established. The signing parties will jointly support Zhongan Energy in constructing 1,000 integrated energy storage and charging exchange stations.
Zhongan Energy is jointly funded by Wanxiang Group, Anhui Natural Gas Development Co., Ltd., Wanxiang Capital, NIO, Guoxuan High-tech, Anhui Provincial New Energy Vehicle and Intelligent Connected Vehicle Industry Fund Partnership Enterprise, with a registered capital of up to 1.6 billion CNY. On the day of its establishment, Wang Qingxian, Deputy Secretary of the Anhui Provincial Party Committee and Governor of the province, personally unveiled the plaque for it, indicating its significance in Anhui.
Industry insiders believe that with the entry of state-owned assets, the public product attributes of NIO's battery swapping stations are becoming evident. As extensive battery swapping cooperation agreements are reached, the construction and operation of NIO's battery swapping stations will greatly reduce operating costs, potentially attracting more capital in the future.
Regarding the development of battery swapping itself, the capital market also holds optimistic views. An Oriental Securities research report indicates that the domestic sales of new energy vehicles are expected to reach 7.8 million units by 2025, with battery swapping models accounting for a potential 30%. This estimation suggests that by 2025, there could be 2.34 million battery swapping vehicles. Open-source Securities predicts that by 2025, the market size of China's battery swapping industry chain could reach 133.4 billion CNY.
An analyst mentioned that NIO is typically seen as a typical case when studying battery swapping models because before large-scale policy support, this model had been questioned mainly due to its numerous technical challenges and significant capital investment. Therefore, prior to NIO, no enterprise had successfully achieved a scaled deployment of battery swapping.
In comparison, NIO appears more "atypical" in the industry, showing a firm commitment to the construction of battery swapping. NIO founder Li Bin once stated that the construction of NIO's battery swapping and energy cloud is similar to the infrastructure of Internet cloud services, going through stages such as "infrastructure construction first, internal closed-loop, comprehensive scenario verification, and external openness." Currently, NIO's battery swapping network construction has been opened to the entire industry.
Currently, the strong support from national policies has validated the proactive deployment of battery swapping business as a forward-looking decision.
In 2023, NIO's "Thousand Stations Plan" was achieved with the construction of 1,035 new battery swapping stations throughout the year. According to the plan, NIO will further construct 1,000 new battery swapping stations in 2024 and complete the construction of a battery swapping network along the "9 vertical and 9 horizontal 19 major city clusters" expressways by 2025, making battery swapping a "new infrastructure" for the intelligent electric vehicle industry.
