Pictured here is a Nio battery swapping station in Haikou, Hainan province, China, on May 9, 2023.
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BEIJING — Chinese electric car company Nio has been expanding its battery swap partnerships in a bid to gain an edge on the infrastructure side of the EV ecosystem.
Since November, Nio has partnered with at least four Chinese automakers — Changan, Geely, Chery and JAC — for developing battery swap standards and expanding the network in China.Nio also announced agreements earlier this year to work with two local battery companies on battery swap services.
All these efforts are aimed at alleviating consumers’ anxiety about driving range. While having a large network of battery charging stations helps address those concerns, battery swapping is a faster method as it takes only a few minutes.
“Swapping right now is mainly driven by Nio. Of course, Nio found out this is an ecosystem,” CLSA’s deputy head of research Ding Luo said in an interview. “If only one player is trying to build up the whole ecosystem, it’s impossible for [them]. That’s why they’re thinking whether they can invite some partners.”
Battery swapping still isn’t mainstream because the car batteries need to be standardized, he added.
While a charging station resembles a typical gas station, battery-swap technology is housed in a shed-like structure. It uses machines to automatically exchange depleted batteries for pre-charged ones in compatible cars.
Nio said in mid-March that it completed 40 million battery swaps compared with nearly 37 million charges at its public stations — Nio consumers can also access third-party charging stations, or install one at home.
“I think our outlook is very simple,” Shen Fei, senior vice president of Nio’s power division, said in Chinese translated by CNBC. “The first thing is to serve Nio’s users, and then provide a good battery charging and swapping experience, make charging more convenient than refueling, and at the same time help the company sell more cars.”
The company claims that with battery swap, drivers can get a fresh charge in three minutes, if they opt in for a paid battery service plan.
Shen said more car models will be added to Nio’s battery swap network, while adding that swapping can allow drivers to keep abreast with improvements in battery technology.He did not specify which automakers will likely be added to its network.
Power services and other products account for just about 10% of Nio’s total revenue. The company said that category of “other sales” for 2023 grew by 69% to 6.36 billion yuan ($895.9 million). Nio does not break out swap station revenue.
Battery swap’s checkered past
Battery swapping has been tried by the industry with mixed success, especially in the U.S.
Tesla and a startup called Better Space tried out swapping more than 10 years ago, but the venture soon closed.
While it’s not clear how much headway Ample has made in the U.S., the company has since expanded its partnerships overseas. Last month the company announced it would serve corporate car fleets in Kyoto, Japan, while it teamed up with Stellantis to roll out battery swaps this year in Madrid, Spain.
“For swapping to work it can’t be niche,” Tu Le, head of consultancy Sino Auto Insights, said. “Battery inventory investment is massive, so it needs to be amortized over lots of swapping.”
But he was cautious on whether Nio could sell enough of its own premium-priced cars to make the economics work. “For now I still think the combination of swapping and charging makes for a pretty attractive feature set, but swapping alone likely doesn’t help them sell that many more cars.”
“I think the nudge the Chinese government gave to encourage others to join forces with Nio on swapping could create the necessary pool of vehicles to make swapping viable,” he added.
The business of charging
Nio is the first major electric car company to roll out battery swap stations in addition to charging stations, alongside its own vehicles in mainland China and Europe.
The company has installed more than 2,300 battery swap stations, and plans to install 1,000 more this year.
Nio’s investment in battery swap stations is about two years ahead of market demand, CEO William Li said last month, adding that less than a fifth of battery swap stations that Nio operates are processing 60 orders a day, likely the minimum orders needed for a station to break even.
Nio’s battery charging stations, on the other hand, reached profitability last year, according to the company. It plans to build 20,000 more this year.
Passenger car battery swap stations can cost around $500,000 to build, while a relatively basic charging station with two ports costs around $200,000 to $300,000, according to Shay Natarajan, a North America-based partner at Mobility Impact Partners, a private equity fund that invests in transportation.
CLSA’s Luo said businesses also prefer to invest in normal charging stations than swap stations because they make a higher return. But if businesses want to install faster-charging stations, he said they might face power grid challenges.
CLSA’s analysis found that the power required for five superchargers in one location would be more than what 300 families would normally consume.
Tesla is also collaborating with automakers in battery charging, with its over 50,000 superchargers worldwide that claim to restore about two-thirds of a battery’s charge in 15 minutes.
The rapid development of electric cars, ostensibly aimed at reducing carbon emissions, also raises questions about battery waste.
Nio pointed out that recent growth of new energy vehicles, which include hybrids, means nearly 20 million batteries will be reaching the end of their eight-year warranty period between 2025 and 2032.
Last month, the company announced a partnership with battery giant Contemporary Amperex Technology to develop batteries with a longer lifespan, particularly for those used in swap stations.
Nio claimed that by using battery swap and big data, it can retain 80% of a battery’s capacity after 12 years of use. Nio also said last month that CATL will develop batteries with longer lives for the company.
— CNBC’s Lora Kolodny and Michael Wayland contributed to this report.
Ted Pick, CEO Morgan Stanley, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 18th, 2024.
Adam Galici | CNBC
Morgan Stanley topped analysts’ estimates for third quarter profit as its wealth management, trading and investment banking operations generated more revenue than expected.
Here’s what the company reported:
Earnings:$1.88 a share vs $1.58 LSEG estimate
Revenue: $15.38 billion vs. $14.41 billion estimate
Morgan Stanley had several tailwinds in its favor. The bank’s massive wealth management business was helped by high stock market values in the quarter, which inflates the management fees the bank collects.
Investment banking has rebounded after a dismal 2023, a trend that may continue as easing rates will encourage more financing and merger activity.
Finally, its Wall Street rivals have posted better-than-expected trading results, making it unlikely that the firm missed out on elevated activity.
Chinese e-commerce company Alibaba has invested heavily in its fast-growing international business as growth slows for its China-focused Taobao and Tmall business.
Nurphoto | Nurphoto | Getty Images
BEIJING — Chinese e-commerce giant Alibaba‘s international arm on Wednesday launched an updated version of its artificial intelligence-powered translation tool that, it says, is better than products offered by Google, DeepL and ChatGPT.
Alibaba’s fast-growing international unit released the AI translation product as an update to one unveiled about a year ago, which it says already has 500,000 merchant users. Sellers based in one country can use the translation tool to create product pages in the language of the target market.
The new version is based only on large language models, allowing it to draw on contextual clues such as culture or industry-specific terms, Kaifu Zhang, vice president of Alibaba International Digital Commerce Group and head of the business’ artificial intelligence initiative, told CNBC in an interview Tuesday.
“The idea is that we want this AI tool to help the bottom line of the merchants, because if the merchants are doing well, the platform will be doing well,” he said.
Large language models power artificial intelligence applications such as OpenAI’s ChatGPT, which can also translate text. The models, trained on massive amounts of data, can generate humanlike responses to user prompts.
Alibaba’s translation tool is based on its own model called Qwen. The product supports 15 languages: Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Turkish and Ukrainian.
Zhang said he expects “substantial demand” for the tool from Europe and the Americas. He also expects emerging markets to be a significant area of use.
When users of Alibaba.com — a site for suppliers to sell to businesses — are categorized by country, developing countries account for about half of the top 20 active AI tool users, Zhang said.
Chinese companies have increasingly looked abroad for growth opportunities, especially e-commerce merchants. PDD Holdings‘ Temu, fast fashion seller Shein and ByteDance’s TikTok are among the recent global market entrants. Many China-based merchants also sell on Amazon.com.
Zhang declined to share how much the updated version would cost. He said it was included in some service bundles for merchants wanting simple exposure to overseas users.
His thinking is that contextual translation makes it much more likely that consumers decide to buy. He shared an example in which a colloquial Chinese description for a slipper would have turned off English-speaking consumers if it was only translated literally, without getting at the implied meaning.
“The updated translation engine is going to make Double 11 a better experience for consumers because of more authentic expression,” Zhang said, in reference to the Alibaba-led shopping festival that centers on Nov. 11 each year.
Alibaba’s international business includes platforms such as AliExpress and Lazada, which primarily targets Southeast Asia. The international unit reported sales growth of 32% to $4.03 billion in the quarter ended June from a year ago.
That’s in contrast to a 1% year-on-year drop in sales to $15.6 billion for Alibaba’s main Taobao and Tmall e-commerce business, which has focused on China.
Nomura analysts expect that Alibaba’s international revenue slowed slightly to 29% year-on-year growth in the quarter ended September, while operating losses narrowed, according to an Oct. 10 report. Alibaba has yet to announce when it will release quarterly earnings.
Check out the companies making headlines in midday trading: UnitedHealth — Shares plunged 7.2% after the health-care giant lowered its earnings guidance due to ongoing headwinds from a cyberattack earlier in the year. UnitedHealth cut the top end of its full-year earnings forecast, which is now $27.50 to $27.75 per share, compared to previous guidance of $27.50 to $28.00 per share. UnitedHealth still reported a top- and bottom-line beat in the third quarter. Walgreens Boots Alliance — The stock soared 11.9% following the drugstore chain’s fiscal fourth-quarter earnings and revenue beat. Walgreens also plans to close about 1,200 stores over the next three years, which will be “immediately accretive” to its adjusted earnings and cash flow, the company said. ASML — Shares dropped more than 16% after the Dutch semiconductor equipment maker released its earnings report early and offered a weaker-than-expected sales outlook for 2025. The company’s CEO also warned of a “more gradual” recovery ahead. Other chip stocks fell as well, with Nvidia , Advanced Micro Devices and Broadcom last down at least 4% each. Wolfspeed — Shares popped 23% on news that the North Carolina-based chipmaker will obtain up to $750 million in U.S. government grants for its new factories in North Carolina and New York. A group of investors including Apollo and Baupost will provide an additional $750 million in funding for its more than $6 billion plan. Bank of America — The lender saw shares gain 2% after it exceeded analysts’ estimates for third-quarter profit and revenue on better-than-expected trading results. Net interest income, one of the key ways that banks make money, fell 2.9% to $14.1 billion, edging out the $14.06 billion StreetAccount estimate. Enphase Energy — Shares slid 6.8% on the back of a downgrade to sector perform from outperform by RBC Capital Markets. The firm said Enphase should grow at a slower rate than the consensus forecast pencils in. Johnson & Johnson — The health-care conglomerate gained 1.6% after posting quarterly results that exceeded expectations on the back of strong sales of oncology drugs. Johnson & Johnson reported adjusted earnings per share of $2.42 and $22.47 billion in revenue. Meanwhile, analysts surveyed by LSEG had forecast $2.21 in earnings per share on $22.16 billion in revenue. The firm also raised guidance for its 2024 profit and sales. Energy stocks — Energy stocks declined as oil prices dropped about 5% , with the sector last down more than 2%. APA was the biggest laggard, tumbling 6%. Diamondback Energy tanked 4.3%, while Occidental Petroleum , Valero Energy and Halliburton lost more than 3% each. Coty — The CoverGirl parent plunged 11% after trimming its fiscal first-quarter guidance and warning of slower growth trends in the U.S. Citigroup — Shares lost about 4% despite stronger-than-expected third-quarter earnings . The bank posted earnings per share of $1.51 on $20.32 billion in revenue. Analysts polled by LSEG had anticipated earnings of $1.31 per share on revenue of $19.48 billion. Charles Schwab — Shares of the brokerage company rallied more than 8% as third-quarter results topped analysts’ expectations. The company posted earnings of 77 cents, excluding one-time items, on $4.85 billion in revenue. PNC Financial — The Pittsburgh-based regional bank rose more than 3% on a better-than-expected earnings report. Earnings came in at $3.49, topping an LSEG estimate of $3.30 per share. The company reported $5.43 billion in revenue, topping a forecast of $5.39 billion. Boeing — Shares added about 2.1% after the aircraft manufacturer said it could raise up to $25 billion in debt and shares to increase liquidity. — CNBC’s Yun Li, Alex Harring, Hakyung Kim, Michelle Fox, Pia Singh, Sarah Min contributed reporting.