Electric cars: Nio to build San Jose facility for testing battery swaps in early move to take business model global, report says
- The facility near Nio’s headquarters in San Jose, California may be operational by November: report
- Nio was the first Chinese maker of electric cars to embark on battery rental to augment its vehicle sales
Nio is building a test facility in the United States for its customers to lease electric-car battery packs, taking a small step towards expanding its battery as a service (Baas) business model.
The facility near Nio’s headquarters in San Jose, California may be operational by November, according to a report by the news portal electric-vehicles.com, citing two unidentified people familiar with the matter.
Shanghai-based Nio would not confirm the report, saying only that it was “moving forward [with] the relevant work as planned”, in its statement to the Post.
Nio, founded in 2014 by entrepreneur William Li, was the first Chinese maker of electric cars to embark on battery rental to augment its vehicle sales, which can slash the cost of alternative-fuel cars by up to 20 per cent and make them more affordable to the driving public.
Li envisions building an assembly in the US by 2025, according to a company source familiar with the matter who asked to remain anonymous as the information is not public. The plan has not been announced officially in any form.
The carmaker was on the lookout as recently as May for US-based professionals with experience in planning manufacturing campuses and logistics, in an apparent move towards building a car assembly in the country, according to two executives at component makers that have business ties with Nio.
At that time, Nio would not comment on whether it had a plan to set up production facilities in the US.
Li, who is also the carmaker’s chief executive, said during Nio’s open day in the Jiangsu provincial city of Suzhou last December that the Tesla competitor wants to bring its products, technology and services to 25 overseas markets including the US by 2025, electric-vehicles.com said.
China overtook the US in 2009 as the world’s largest vehicle market, and is now the fastest-growing market for vehicles that run on non-fossil fuels, including battery packs, hydrogen fuel cells and hybrid petrol-electric cars.
But the country’s array of carmakers have yet to gain brand-name recognition in any meaningful way outside mainland China.
Nio, Guangzhou-based XPeng and Beijing-headquartered Li Auto, are viewed as the three major rivals to Tesla, the global EV leader, in the Chinese market.
XPeng and Nio have exported small numbers of their China-made electric vehicles to European markets such as Norway and Germany. Li Auto said it was considering setting up production lines in Europe if its cars were well received by customers there.
Nio’s shares are listed in New York, Hong Kong and Singapore. It operates a research and development centre at its US headquarters in San Jose, and employs a team of software developers there. The company’s July deliveries shrank by 22 per cent to 10,052 units.
Any attempt by China’s electric carmakers to gain a foothold in Western markets will take time, said UBS analyst Paul Gong.
“They will face an uphill task in understanding local markets,” he said. “It is unlikely that their go-global drive will materialise soon.”