CATL plans to take over Nio’s battery business
The two companies had already announced an extensive cooperation in March: CATL plans to invest up to 2.5 billion yuan (over 310 million euros) in Nio Power, Nio’s subsidiary for the energy business. Conversely, Nio’s subsidiary brand Firefly will switch to CATL’s new Choco-SEB system from the second model onwards.
As Reuters is now reporting, CATL is in talks with Nio to acquire a majority stake in Nio Power, for which the news publication is citing four insiders. It is still unknown how much CATL is offering for Nio Power. Last year, Nio Power was valued at more than 10 billion yuan (approx. 1.25 billion euros) in a capital-raising round. CATL declined to comment on the matter.
Nio did not respond directly to Reuters‘ questions about the potential transaction, but said it was promoting the joint construction of battery exchange stations “with multiple investors, including CATL.” The company did elaborate bit on the cooperation, however: “Nio and CATL will deepen collaboration on capital and business and further consolidate the strategic partnership to jointly build the largest battery swapping network globally.”
Majority ownership of the battery swapping company would be an advantageous move for CATL, as the network development is very capital-intensive. Additionally, as long as only cars from a single manufacturer can use the battery exchange stations, the utilisation of the stations remains a challenge. Nio has built up a network of 3,240 locations worldwide, over 3,000 of which are in China. It is not yet clear how such a deal would affect Nio’s battery exchange stations in Europe.
In 2022, CATL took its first steps in the field of battery-swapping and announced a network of battery exchange stations called EvoGo, which is expected to reach 1,000 locations by the end of this year. A takeover of the Nio business would greatly expand the network. However, one major challenge presents itself, as the two systems are not compatible. CATL relies on specially developed battery packs called Choco-SEB (Swapping Electric Blocks), which will be offered to car manufacturers for future electric car models.
CATL founder and CEO Robin Zeng announced his intention to reinvent his 25-year-old company, with the aim of going beyond battery production and becoming a provider of green energy. Zeng set the goal of replacing a third of the petrol stations in China over the next few years. A major cooperation in this area was also just announced with the state-owned oil company Sinopec to set up 10,000 battery exchange stations over the next few years. The partners plan to construct 500 of them this year.
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