Nio needs a European partner to manage battery assets as the Chinese electric-vehicle maker expands its subscription service abroad, CEO William Li said.
The company faces mounting financial pressure from holding batteries on its balance sheet in Europe, unlike in China where an independent asset-management firm handles the inventory, Li told customers at a Norway event this week.
The EV maker has currently 61 battery swap stations in Europe. The first one opened in January 2022 in Norway.
In China, the number of stations surpasses 3,550 with nearly 91 million swaps provided since 2018.
Balance Sheet Burden
“In China we have established a battery asset management company together with battery companies like CATL,” Li said, referring to the world’s largest battery maker Contemporary Amperex Technology Co.
“But in Europe, we don’t have such a partner or such a company which means that all the battery assets provided via BaaS will be held by us in our balance sheet—which can be quite a significant financial pressure and burden.”
Battery-as-a-Service allows drivers to lease batteries separately from vehicles. In China, 80% to 90% of Nio buyers purchase cars while subscribing to batteries, Li said.
“We do need to find a partner that can actually hold these battery assets with us or for us so that we can continue such service,” the CEO said.
“For the long run, we believe that this is actually providing our users a very good experience and it is beneficial not only to our business but also to our users’ experience,” he added.
Mirattery Structure
Mirattery, Nio‘s battery asset operator also known as Wuhan Weineng, was founded in August 2020 to support the BaaS model. Nio, CATL, Guotai Junan and Hubei Science and Technology Investment each held 25% stakes at launch.
Nio became the largest shareholder over time with a 19.4% stake. CATL and Hubei Science and Technology Investment each hold 10.68%.
The battery-asset company closed a 670 million yuan ($94.2 million) Series C financing round this week.
Two state-owned enterprises joined as new shareholders: Haining Economic Development Zone Industrial Park Development & Construction Co. and Hainan Chengmai Development Holding Group Co.
Mirattery’s operational capacity exceeds 27 gigawatt-hours, serving more than 350,000 users in China as of July.
CATL Deepens Ties
Nio and CATL established a new joint venture in Wuhan last month.
Weineng (Wuhan) Battery Technology Co. is wholly owned by Wuhan Weineng Battery Asset Co. The entity has registered capital of 100 million yuan ($13.8 million) and will focus on battery leasing, recycling, secondary utilization of retired power batteries and EV charging operations.
In March, CATL agreed to invest up to 2.5 billion yuan ($346 million) in Nio Power, the automaker’s energy and battery-swap business. The investment targets a unified national swap network and shared industry standards.
Mirattery signed a strategic cooperation agreement with CATL in July covering equity investment, battery rental services and co-construction of battery-swap networks. The companies did not disclose investment amounts.
Scrutiny Over Structure
Nio‘s battery-asset structure drew scrutiny last month following a lawsuit filed by Singapore sovereign wealth fund GIC in the United States.
The fund alleged Nio and its management inflated revenue by more than $600 million through Weineng, echoing a 2022 Grizzly Research report that compared the relationship to Valeant’s use of Philidor.
CATL unveiled its “Chocolate Swap” system last December, using standardized modules designed for cross-brand compatibility as the world’s largest battery maker expands into swapping technology.
Nio CEO Li dismissed a report last April suggesting CATL was seeking a controlling stake in Nio Power, telling customers in a group chat: “Don’t believe or spread rumors.”
The company will be piloting the first 5th generation swap stations in December, with mass production of the new generation planned for early next year.
