Investors are keeping a close eye on Nio (NYSE:NIO) stock today after the Chinese electric vehicle (EV) maker announced a new deal with Chinese state-owned FAW Group for battery-swap services.
Indeed, per the new strategic cooperation framework agreement signed May 21, Nio and FAW will work toward the shared establishment of “battery technology standards,” develop model-swappable batteries and further enhance their battery management networks.
FAW represents the seventh battery-swapping partnership for Nio, closely following similar agreements with Guangzhou Automobile Group (GAC) and Geely (OTCMKTS:GELYY).
Reasonably so, just last week, Nio CEO William Li stated that he believes the company’s battery-swapping services will bring in $10 billion in revenue annually “when its user base grows by 100 times from half a million units currently,” per Reuters.
Nio also recently announced plans to add 1,000 more battery-swapping stations to its network by the end of 2024, from its current 2,415 active stations.
Interestingly, in a short video posted Tuesday, Li stated that he will be making a trip to Europe to see the opening of a new “Nio House” in Amsterdam. “Tomorrow Qin Lihong and I will drive together from Frankfurt to Amsterdam, the Netherlands, to witness the opening of our new Nio House in Amsterdam,” said the CEO.
NIO Stock Slides Despite Battery-Swap Deal
Despite the news, Nio just can’t seem to beat the bears lately. Indeed, NIO stock was in the red earlier today, although shares are now up 0.5% as of this writing. Nio has been one of many casualties of this year’s EV selloff, down 37% year-to-date (YTD).
With EV sales stagnating for many companies in recent quarters, the entire industry has experienced a brutal correction. Companies like XPeng (NYSE:XPEV), Li Auto (NASDAQ:LI) and former EV darling Tesla (NASDAQ:TESLA) have each lost more than 25% of their value so far this year, wiping billions in market capitalization.
Still, that hasn’t stopped Nio from continuing to build its battery-swapping infrastructure, which appears to be a major focus of the company along with its newly launched low-cost Onvo brand.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
