Chinese automakers Nio (NYSE:NIO) and Zhejiang Geely Holding Group, on Wednesday, announced a strategic partnership agreement focused on battery swapping.
This collaboration between the automakers involves joint efforts in setting standards, advancing technology, and developing models.
Geely, known for its diverse brands like Volvo and Zeekr, becomes the second automaker to forge a battery swapping alliance with Nio.
Geely and Nio have agreed to adopt a collaborative approach centered around a "co-investment, co-construction, shared, co-operative" model, as stated by the companies involved.
The companies aim to create an effective battery asset management system, construct a standardized battery swap infrastructure, and design vehicles capable of swapping batteries that are compatible with both systems, as specified by the companies.
Battery swapping holds the potential to alleviate pressure on power grids during peak times when drivers recharge. However, analysts and executives expect the method will only become practical once batteries become more standardized.
Nio, aiming to almost double the overall count of these stations in China within the current year, stands among a few EV manufacturers betting significantly on battery swapping as a primary power solution for electric vehicles.
In 2021, Geely announced its goal to establish 5,000 battery swapping stations worldwide for electric vehicles by 2025.
At that time, Geely had 300 operational stations and expressed its intention to proceed with station development independently while also collaborating with Nio in establishing additional stations.
Shares of NIO are down 0.07% in afternoon trading on Wednesday.