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.
Check out the companies making headlines in midday trading: T-Mobile — Shares pulled back 11% after the company’s wireless subscribers for the first quarter missed Wall Street estimates. T-Mobile reported 495,000 postpaid phone additions in the first-quarter, while analysts polled by StreetAccount were looking for 504,000. Alphabet — The Google parent company gained about 2% on the heels of better-than-expected first-quarter results . Alphabet reported $2.81 per share on revenue of $90.23 billion, while analysts polled by LSEG forecast $2.01 in earnings per share and $89.12 billion in revenue. Skechers — Shares fell 4.8% after the footwear maker posted weaker-than-expected revenue for the first quarter and withdrew its 2025 guidance due to ” macroeconomic uncertainty stemming from global trade policies .” The company’s earnings for the quarter came in above analysts’ estimates, however. Gilead Sciences — The biopharmaceutical stock fell 2.5% after first-quarter revenue came in at $6.67 billion, missing the consensus forecast of $6.81 billion from analysts polled by LSEG. However, the company earned $1.81 per share, excluding items, in the quarter, beating Wall Street’s estimate of $1.79 a share. Saia — Shares of the shipping company fell 31% after first-quarter results missed estimates and showed a slowdown in March. Saia reported $1.86 in earnings per share on $787.6 million in revenue. Analysts surveyed by FactSet were expecting $2.76 in earnings per share on $812.8 million in revenue. BMO Capital Markets downgraded the stock to market perform from outperform and said the issues were “company specific.” Intel — The chipmaker declined 7% after Intel’s current quarter missed investors’ expectations. Intel forecast revenue in the June quarter of $11.8 billion at the midpoint, while consensus forecasts called for $12.82 billion, per LSEG. Management anticipates earnings will break even. Intel also announced plans to reduce both its operational and capital expenses. Boston Beer — Shares of the Samuel Adams brewer were more than 1% higher after better-than-expected first-quarter results. Boston Beer notched earnings per share of $2.16 on revenue of $453.9 million, while analysts polled by FactSet were looking for 56 cents per share on revenue of $435.6 million. Boston Beer cautioned that tariffs could hurt full-year earnings. Tesla — The Elon Musk-helmed electric vehicle company surged 10%. Shares have advanced more than 17% this week as the broader market tries to recover from a steep sell-off for much of April. — CNBC’s Jesse Pound, Alex Harring and Sean Conlon contributed reporting. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
Check out the companies making headlines before the bell: Meta Platforms — The Facebook and Instagram parent jumped about 3%. Meta cut staff in its Reality Labs division, CNBC reported. Alphabet — The Google and YouTube owner climbed more than 4% after first-quarter results topped Wall Street expectations. Alphabet earned $2.81 per share on $90.23 billion in revenue for the quarter, while analysts surveyed by LSEG had estimated $2.01 per share and $89.12 billion in revenue. T-Mobile — Shares of the telecommunications company fell 5.5% after it reported fewer first-quarter wireless phone subscribers than the Street expected, seeing 495,000 postpaid phone additions versus analysts’ call for 504,000, according to StreetAccount. Earnings and revenue for the first quarter topped Street estimates. Intel — The chipmaker fell 7.2% after the outlook for the current quarter disappointed investors. Intel guided for revenue in the June quarter to come in at $11.8 billion at the midpoint, less than consensus calls for $12.82 billion, according to LSEG. Management anticipates earnings will break even. Intel also announced plans to reduce its operational and capital expenses. Gilead Sciences — The biopharmaceutical stock slid 3.9% after posting first-quarter revenue of $6.67 billion, missing the consensus estimate of $6.81 billion from analysts polled by LSEG. Gilead earned $1.81 per share, excluding items, in the quarter, while Wall Street penciled in $1.79. Skechers — The footwear maker slumped 6% after reporting lower-than-expected first-quarter revenue and withdrew its 2025 forward financial forecasts on account of ” macroeconomic uncertainty stemming from global trade policies .” Skechers’ bottom-line results came in above analysts’ forecasts. Charles Schwab — The financial services provider advanced 1.4% after Goldman Sachs upgraded shares to buy from neutral, calling Schwab a resilient growth stock amid an uncertain backdrop. Hasbro — The toy company rose about 1% one day after soaring 15%. Citigroup raised its investment opinion to buy from neutral, saying Hasbro’s stronger-than-expected Wizards of the Coast business outweighs any uncertainty stemming from tariff policy, according to analyst James Hardiman. Boston Beer — Shares of the Samuel Adams brewer rose nearly 3% after first-quarter results beat expectations. Boston Beer generated $2.16 in earnings per share on $453.9 million of revenue, while analysts surveyed by FactSet looked for 56 cents per share on $435.6 million in revenue. Boston Beer warned in its outlook that tariffs could hurt full-year earnings. — CNBC’s Alex Harring and Jesse Pound contributed reporting. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
“I think having that professionally managed portfolio is really beneficial to clients,” Coyne told CNBC’s “ETF Edge” this week. “We’re seeing just… greater volatility [and] uncertainty across both the equity and fixed income markets.“
According to Coyne, the T. Rowe Price Capital Appreciation Equity ETF suits investors who are looking for long-term growth.
“The objective of the fund is to outperform the S&P 500 with lower volatility and greater tax efficiency,” he said. “It’s also a more concentrated portfolio, typically holding around a hundred names.”
The T. Rowe Price Capital Appreciation Equity ETF is down about 5% so far this year while the S&P 500 is off about 7% However, the ETF is up close to 8% over the past year — roughly identical to the S&P 500’s performance.
Coyne notes the T. Rowe Price U.S. Equity Research ETF follows a similar strategy, but with a heavier weighting in top tech stocks.
“This is more of a large-cap growth product [T Rowe Price U.S. Equity Research ETF],” he said. “There are components of characteristics of both passive and active here. This fund is actually managed by our North American directors of research. So again, strong fundamental research is going into the stock selection.”
Both the T. Rowe Price U.S. Equity Research ETF and S&P 500 are down around 7% since the beginning of the year. Meanwhile, the fund is up almost 9% over the past year. That’s less than one percent better than the S&P 500’s performance.
T. Rowe Price U.S. Equity Research ETF vs. S&P 500
‘Some form of bear market’
Strategas Securities’ Todd Sohn thinks investment demand for active managers will continue to be strong.
“This is the type of the environment where it [active management] can actually shine,” the firm’s senior ETF and technical strategist said. “We are in some form of bear market. This is where the active manager really can come into hand and offer their solution they are doing right.”