Home » NIO’s BaaS model could become a mainstream option for battery swap players, says CITIC Securities

NIO’s BaaS model could become a mainstream option for battery swap players, says CITIC Securities

by SEP Editor
3 mins read
(Photo credit: XPeng)

Top Chinese brokerage CITIC Securities suggested that NIO’s Battery as a Service(BaaS) model may be the mainstream option for players in the battery swap space on Jan. 19, 2022, considering the fact that it would have the strongest business certainty when provided to operational vehicles. 

NIO is a leading player in the Chinese electric vehicle market and their unique technology grants it several long-term advantages over competitors, such as Tesla, XPeng, Li Auto and so on. NIO’s battery as a service subscription option offers NIO a unique advantage and solves many of the problems consumers have with EVs. NIO has what other EVS are missing, BaaS. 

What is Baas?

Bin Li, NIO’s CEO, concludes the characteristics of BaaS:

  • Separation of vehicle and battery
  • Rentable batteries
  • Batteries able to be charged, changed, and upgraded
  • BaaS users enjoy an RMB 70,000 off from the car price, for a battery subscription starting from RMB 980 per month, representing lower purchasing and using costs than ICE vehicles in the same premium segment

The advantages of BaaS

1. Reducing customer’s concern about battery’s life

  • The greatest cost of electromotive cars is the battery which is why Tesla builds their own battery factories. 
  • Because the battery is now changeable, its attenuation becomes NIO’s responsibility instead of the buyer’s. Now, the cost of the battery is eliminated from the customer’s concern. They would not need to worry about their car depreciating at a great speed anymore. 

2. Enjoying the upgrading of battery technology

  • There has always been fast advancement, increasing endurance and descending costs of batteries. 
  • However, buyers of older versions of electromotive cars might be restricted by the change of battery’s size or price and can not benefit from better battery technologies. 
  • If the batteries are changeable, owners of older cars are able to get the newest type of batteries as well. 

3. Hedging second-handed cars

  • Batteries, which is the part that depreciates the fastest, is maintained and changed by NIO.
  • The protection of other parts of the electromotive vehicle is relatively easy in comparison. The high hedging will contribute to the profit of the BaaS plan. 
  • NIO knows that they will continue to improve their battery capacity over time and that consumers are still looking for more range out of their cars. For that reason, all of their cars are designed to be able to fit any future batteries in them.
(Photo Credit: baidu.com)

CITIC’s evaluation of charging stations in the future and its influence on NIO

The Chinese central government greatly encourages charging infrastructure for electromotive vehicles to develop. It sets targets (120,000 EV charging stations and 4.8 million EV charging posts by 2020), provides funding, and mandates standards.

They also provide subsidies to manufacturers of electric vehicles, such as NIO. All NEVs are eligible for a subsidy of the value of USD 1,500-3,600, depending on the type and range of the vehicle.

However, the insufficient supply of electricity in China might be a problem for NIO’s plan of building more charging stations. 

NIO’s current emergency is to occupy enough space for possible building plans in the future. The building speed of NIO in 2020 is not fast, but it will enhance in the future.  

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