For years, Chinese EV maker Nio has essentially done it all, delving into high-end EV manufacturing, in-house batteries, autonomous driving, and chips, as well as innovative battery-swapping tech and even making smartphones, all while pulling in huge investments and talent to make that happen. Now, according to a new report, it’s looking to lighten the load.
As reported by Reuters, Nio now plans to spin off its battery unit in hopes of turning a profit, cutting costs, and improving efficiency – and offloading some of its ambitions to pursue end-to-end strategies in EV tech. The move could take place as early as the end of this month, after which the battery unit will seek outside investors, followed by a valuation, according to two people familiar with the matter who spoke to Reuters.
Nio’s current battery unit is headed by senior engineers who worked previously at Apple and Panasonic. During last year’s earnings report, CEO William Li said that the battery team comprised 400 people researching battery materials, cells, and battery management systems. In terms of the new company, the top engineers will presumably join the spin-off, while other employees will be merged into Nio’s other divisions, the report said.
Nio brought on a team of engineers “to mass-produce large cylindrical batteries similar to the Tesla 4680 in a planned plant in China’s eastern Anhui province in 2025 at the earliest,” Reuters writes. In February, reports stated that the plant would have an annual capacity to produce 40 GWh of batteries to power about 400,000 long-range EVs.
Nio of course hasn’t been immune to market pressures on EV makers, with a reported third-quarter loss of 4.56 billion yuan ($637.06 million) on Tuesday, a 10.8% increase from the same period a year ago. CEO Li, who has not mentioned any plans for a spin-off, is focusing on reassuring investors that the company isn’t in over its head, saying that they’ll cut staff by 10% and defer long-term investors to save up to 2 billion yuan in costs this year.
Nio has also partnered with Geely and state-owned Changan Automobile to develop EVs capable of battery swaps, making Nio the only passenger vehicle manufacturer advancing this potential. Nio, which already sells in Europe, is also looking to build a dealer network in the region to accelerate sales. It also has targeted 2025 as a goal for expanding to the US – no small ambition.
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