❯ Geely swaps its battery-swap unit plus RMB 640 million for 30% of NIO Power as the two plan to share the network

Equity for equityOn September 28, NIO announced on the Hong Kong exchange that it has signed definitive agreements with several subsidiaries of Geely Holding Group covering battery swapping and charging. A Geely subsidiary will contribute 100% of E-Energy (Yiyi Hulian) plus RMB 640 million in cash to subscribe for newly issued equity in NIO Power. After closing, Geely will own 30% of NIO Power, NIO China will keep a controlling 63.6%, and existing investor Wuhan Guangchuang Emerging Technology Venture Fund I will hold 6.4%, giving NIO Power a post-money valuation of about RMB 16 billion. According to Sina and others, the deal still requires regulatory approval and other customary closing conditions.

Private cars meet fleetsNIO Power is NIO’s battery swapping and charging unit, running the 4,125 swap stations in the previous story, mainly serving private NIO and Onvo owners. E-Energy is Geely’s swap business for commercial vehicles such as taxis and ride-hailing cars. One is strong in private cars, the other in commercial fleets; combined, NIO Power can extend into fleets that drive more and swap more often.

Milestones and a top-up optionGeely’s stake is tied to operating milestones; if performance falls short after closing, it may be adjusted down, but not below 20%. Geely also holds an option, exercisable within two years of closing or before NIO Power signs a binding agreement for a new funding round, whichever comes first, to invest another RMB 640 million in cash, lifting its stake to 34% and reducing NIO China’s to 60%. In parallel, NIO China will subscribe in cash for new equity in Geely’s charging unit Haohan Energy, taking 10%; that cash will be used to buy certain charging assets from NIO. The two groups have also drawn up preliminary plans to bring battery swapping to consumer models and mobility-service vehicles of Geely-affiliated brands, subject to further discussion.

From solo networks to a shared platformBattery swapping has been held back for years by incompatible battery standards and networks that can’t be shared. Cross-shareholding between two major automakers gives swapping its first real chance to move from one brand’s add-on to infrastructure used by several; if Geely models actually plug in, NIO’s most cash-hungry network finally gets enough cars to spread its costs.

▪ SIGNALGeely trading its own swap business for shares shows rivals now see value in the network; the 20% floor is a reminder that the value still has to show up in operating data.