Battery swap was questionable as a huge investment model a few years ago, but with encouragement from the Chinese government, more and more players are adopting it. The latest move by a Xiaomi affiliate has sparked speculation that the smartphone giant may also support the model.

Xiaomi's e-commerce platform Youpin Information Technology Co recently added to its scope of operations a business that includes sales of new energy vehicles and sales of battery swap facilities, information from data provider Qichacha shows.

Numerous Chinese media reports have raised questions about whether this means Xiaomi's car business will adopt a battery swap model similar to Nio's.

There are currently two models of new energy vehicle replenishment, including one like Tesla and Xpeng Motors' supercharging and home charging networks, which is the model currently used by most new carmakers and mainstream OEMs.

The other one is adopted by a few brands, such as Nio, which provides an additional battery swap mode in addition to supercharging and a home charging network.

Battery swap not only reduces the initial acquisition cost for users, but also improves service efficiency and saves more time, experience, and financial resources in the infrastructure phase.

China's current policy clearly favors the latter, for example, there are no subsidies for pure electric vehicles over RMB300,000 ($46,479), except for those that support battery swap.

Currently, battery swap-enabled vehicles are already taking shape, with Nio being the only company to deliver such vehicles on a large scale to the general consumer, and Beijing Electric Vehicle offering a large number of such vehicles to the cab market.

As to why China supports the battery swap model, CnEVPost previously reported that Chinese Vice Minister of Industry and Information Technology Xin Guobin mentioned the advantages of the battery swap model at a conference last year:

First, battery swap mode allows the body to be separated from the battery, which can reduce the cost of car purchases for consumers.

Second, the battery swap pool time is shorter than the time to fill a tank of gas, which can make consumers travel more conveniently.

Third, the battery operation company will monitor, maintain and manage the battery centrally, which is conducive to extending the life of the power battery and improving the safety of the battery.

Fourth, such batteries can be charged at preferential tariffs that are underestimated by electricity consumption, thus reducing charging costs.

Fifth, consumers can consider how large the capacity of the battery rented that day according to the daily mileage, so as to save energy.

Sixth, the battery swap model can also give rise to a new service industry.

Xiaomi announced its entry into the smart electric vehicle market on March 30, with an expected investment of $10 billion over 10 years, the first installment being RMB 10 billion, with its founder Lei Jun also serving as CEO of the smart electric vehicle business.

BYD in talks with Xiaomi for co-op in car building, says chairman

(Source: Xiaomi)