Nio Power has secured a RMB 1.5 billion ($207 million) strategic investment, the first external investment the unit has received, to support its continued infrastructure drive.

Nio Power, the power unit of Nio (NYSE: NIO), has secured a RMB 1.5 billion ($207 million) strategic investment, the first external investment the unit has received to support its continued infrastructure drive.

Nio Energy Investment (Hubei) Co Ltd (Nio Power) received a RMB 1.5 billion ($207 million) strategic investment on May 31 led by Wuhan Guangchuang Emerging Technology Venture Capital Fund Phase I, Nio announced today.

The financing will be directed towards advancing research and development, manufacturing and operations in areas such as charging, battery swapping, energy storage, battery service, and energy internet, Nio said in a statement.

The financing will also be used to enhance Nio Power's charging and swapping infrastructure network, and supporting innovative initiatives in vehicle-to-grid (V2G) interaction, it said.

Nio did not announce Nio Power's valuation in the financing, or the number of shares acquired by Wuhan Guangchuang.

Nio Power was founded in May 2017 in Wuhan, Hubei province in central China, and was previously wholly owned by Nio Holding, with legal representative Shen Fei, vice president of Nio.

The financing provides a financial boost to Nio Power's rapid growth, optimizes the unit's capital structure, and lays a solid foundation for Nio Power's longer-term, high-quality development, Shen said.

Wuhan Guangchuang is a government-backed industry fund, and the Wuhan government said on its Weibo page that the investment is aimed at making a leading company to become stronger and accelerate the adoption of the battery swap model.

Nio management said in an earnings call on December 5, 2023, that the company did not rule out the possibility of a separate financing for the power unit.

As of May 31, Nio had 2,427 battery swap stations and 22,595 charging piles in China, making it the automotive brand with the most such facilities, Nio said.

Nio's charging piles are open to users across the industry, with more than 80 percent of the power serving users outside of Nio brand, it said.

Nio's statement re-emphasized Nio Power's openness to external partners, saying that the unit has previously entered into charging and swapping agreements with Changan Automobile, Geely Holding, Anhui Jianghuai Automobile Group (JAC), Chery, Lotus, GAC Group, China FAW Group to promote a larger, standardized and unified energy infrastructure network.

Nio sees its battery swap service as similar to a cloud service, and William Li, its founder, chairman, and CEO, has mentioned several times that the service has reached a point where it can be opened up to partners.

The investment in charging facilities also gives Nio one of the largest charging networks in China, with brands including IM Motors, Hyper, Deepal, SAIC-GM, Jiyue, and Geely having already announced access to the network.

Nio no longer continues to lose money on its charging business, one of the few businesses the company doesn't lose money on, Li said at the Nio IN 2023 Innovation Day event held on September 21, 2023.

At the Nio Day 2023 event on December 23, 2023, Nio unveiled its fourth-generation battery swap station, as well as the new 640-kW supercharger.

Nio plans to continue adding 1,000 more battery swap stations in China in 2024, bringing the total to more than 3,310, the company said at the time.

The company also aims to add 20,000 new charging piles in 2024, bringing the total to more than 41,000, it said.

Nio's fourth-generation battery swap stations are yet to start operations. It started the year with a slower infrastructure buildout pace, having built 111 battery swap stations in China so far this year, according to data compiled by CnEVPost.

($1 = RMB 7.241)

Nio delivers over 20,000 cars in May, mobile app poster hints