Shares of Chinese electric vehicle maker Nio rose sharply in Hong Kong trading on Tuesday, following reports that battery manufacturer CATL is in talks to acquire a controlling stake in Nio’s battery-swapping unit, Nio Power.
The stock climbed 8.6% to HK$26.60 after sources told Reuters that CATL, the world’s largest EV battery producer, has pledged up to 2.5 billion yuan ($342 million) to support Nio Power. The unit, which operates more than 3,200 battery-swapping stations in China, was recently valued at over 10 billion yuan ($1.3 billion) following a fundraising round earlier this year. The financial terms of CATL’s proposed stake have not been disclosed.
See also: CATL in Talks to Acquire Controlling Stake in Nio Power
Nio confirmed that it is working with several investors, including CATL, to scale its battery-swapping infrastructure. “Nio and CATL will deepen collaboration on capital and business and further consolidate the strategic partnership to jointly build the largest battery swapping network globally,” the company said.
The reported move by CATL aligns with its long-term strategy to expand into green energy services. The battery maker recently partnered with state-owned Sinopec to deploy 10,000 battery-swapping stations, with 500 planned for rollout in 2024. The partnership with Nio Power would further advance CATL’s goal of transforming a significant portion of China’s fueling infrastructure into battery-swapping locations.
See also: Nio Raises HK$4.03 Billion Through Expanded Share Placement
Battery-swapping has become a core component of Nio’s service model, addressing concerns over EV range and charging times. Its 3,240 active stations, largely located in China, allow drivers to replace batteries in under three minutes. While the system also supports third-party vehicles from manufacturers such as Tesla and BYD, Nio’s capital-intensive approach has weighed on its financial performance.
If successful, the deal could position CATL and Nio to lead in a key segment of EV infrastructure as China’s competitive electric vehicle market continues to evolve.