August 20th, 2020 by Kyle Field
In a livestreamed media session today, NIO Vice President of Power Management Shen Fei officially launched NIO’s new Battery-as-a-Service strategy. The new service decouples the battery from the purchase price of the vehicle, providing a lower up front purchase price, more flexibility to the owner in the future, the ability to swap batteries on long trips, and additional business opportunities for NIO.
Battery-as-a-Service As A Key Enabler For Electrification
The battery is the single most expensive component in an electric vehicle, so removing the battery from the initial purchase event makes electric vehicles more affordable for new owners. The new business is made possible by the removable battery that is fundamental to the design of all NIO vehicles and makes the batteries in NIO vehicles chargeable, swappable, and upgradeable.
Owners of NIO vehicles have the ability to easily upgrade the battery in the vehicle as newer battery technologies emerge or as the battery reaches the end of life. They can also upgrade to new, higher capacity batteries as battery technology improves in the future. That is potentially a massive advantage for NIO over the competition.
Designing the vehicles from the ground up with a removable battery also enables battery swapping. This reduces the time required to refill the battery to a time comparable to the time it takes a petrol vehicle to refuel. NIO believes this flexibility makes it easier for customers new to the world of electric vehicles to overcome the fear of range anxiety and battery degradation.
NIO Power’s Comprehensive Approach
Battery swapping is sexy, but the hope is still for most users to recharge their vehicles at home, at work, or on the road with a traditional wall charger. NIO Power has developed a comprehensive suite of solutions to make it easy for NIO owners to get charged up and back on the road, whatever the situation.
As the foundation of the system, NIO Power offers AC charging units with the NIO Power Home 2.0 and Power Home Plus. These units are well suited for use at home or installed at a workplace where vehicles can be left to charge for hours at a time. For owners who need to get back on the road sooner, but have some time to charge while eating or grabbing some tea, NIO offers a comprehensive suite of fast charging options. In total, over 35,000 NIO chargers have been installed.
Owners that simply can’t wait or are in a hurry to get back on the road are able to simply pull into a NIO Power Swap station. These stations offer a more premium service to simply swap out the battery. The process only takes a few minutes and replaces the battery in the vehicle with a fresh, fully charged battery from the racks. NIO currently has 143 of these battery swap stations spread across 64 cities in China. Early stations were deployed along expressways along critical routes for commuters and NIO plans to have an additional 50 stations online by the end of 2020.
With just this small footprint of deployed stations, NIO has already performed over 800,000 battery swaps for customers through August 2020. The stations themselves are extremely compact, taking up the equivalent footprint of 3 parking spaces. Each of these stations can store five batteries and service up to 70 vehicles per day.
Finally, NIO’s Power Mobile team offers an impressive 40-60kW mobile charging service wherever the electric vehicle might be. These mobile vans can supply a charge to any brand of electric vehicle for both emergency charging and as a white glove valet charging service.
NIO’s charging solutions are rolled together with all of the existing public EV charging locations in the NIO Power Map app. In total, more than 320,000 public charging points are currently listed in the app.
A Lower Price Tag
NIO has already delivered the first NIO vehicle using this new battery-as-a-service model and it will be available to new customers moving forward. Impressively, owners opting to sign up for the battery-as-a-service model are still eligible for all government incentives that comes with the purchase of a standard electric vehicle. The battery leasing service also includes 6 battery swaps per month at NIO Power Swap stations.
Compared to purchasing a standard NIO with a 70kWh battery, opting to lease a battery through NIO’s battery-as-a-service model saves owners RMB 70,000 (~$10,000 USD) at the time of purchase. Obviously, this is offset with the cost of the battery lease over the life of the vehicle, but it is a nice option for owners to have.
To manage the battery side of the business, NIO is spinning up a Battery Asset Management business unit. Standing up a separate business unit to manage the battery side of the business allows NIO to maximize the value of the decoupled batteries for the business and owners.
For example, batteries being held in a Power Swap station could be used as backup grid power in an emergency. NIO believes the full potential of the decoupled battery side of the business will be most effectively explored by dedicated business unit.
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