Nio and Geely in battery swapping and charging deal

Electric vehicle (EV) maker Nio Inc. (NIO.US; 9866.HK) announced on Monday that it has entered into definitive agreements with subsidiaries of Zhejiang Geely Holding Group Co. Ltd. covering the battery swapping and charging businesses. Upon completion, a Geely Holding subsidiary will own 30% of Nio Power.

Under the agreements, the Geely Holding subsidiary will contribute its entire stake in Yiyi Internet Technology (Chongqing) Co. Ltd., which provides battery swapping services for commercial vehicles, plus 640 million yuan ($95 million) in cash to subscribe for newly issued shares in Nio Energy Investment (Hubei) Co. Ltd., also known as Nio Power.

After completion, Nio Holding Co. Ltd., known as Nio China, will retain a controlling 63.6% stake in Nio Power, while an existing investor will hold the remaining 6.4%. The deal values Nio Power at approximately 16 billion yuan after the investment.

In a concurrent transaction, Nio China will subscribe for newly issued shares representing 10% of Zhejiang Haohan Energy Technology Co. Ltd., Geely Holding’s charging business. Haohan Energy will use the cash proceeds to buy certain charging assets from Nio. The companies have also drawn up preliminary plans to provide battery swapping technology and services for consumer vehicles and commercial mobility businesses affiliated with Geely Holding, subject to further discussions.

Nio said the transactions reflected industry recognition of its battery swapping technology, network and operating capabilities. It expects the collaboration to encourage wider adoption of battery swapping and support the growth of EV use.

Following the announcement, Nio’s shares opened higher on Monday in Hong Kong and traded at HK$28.44 by the midday break, up 1.35%. The stock is down 30.5% year to date. Shares of Geely Automobile (0175.HK), a separately listed company within the Geely group, rose 1.79% in morning trading to HK$15.88 and are down 11.2% year to date.

By Lee Shih Ta

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