16 Dec Electric Car Startup, Nio Inc., ties up with Xpeng Motors for Sharing Charging Stations
Nio, Inc (NYSE: NIO), a Chinese electric vehicle manufacturer, has announced an agreement with Xpeng Motors, for sharing charging stations, pertinent information as well as services, with an eye to boost EV demand and reduce costs. The agreement will enable customers of Nio and Xpeng to charge their cars using either company’s charging stations at no additional cost, with Nio also offering home-charger installation services for certain Xpeng customers.
The partnership comes in the wake of declining EV sales in the world’s largest Electric Vehicle market, with the Chinese government cutting down on subsidies on one hand and the drastic fall in EV Sales by almost 42 percent in November 2019 to 79,000 units, on the other. In addition the scarcity of charging infrastructure and range anxiety is hampering the growth in the market. The agreement will help both the Companies limit costs and achieve synergies of scale due to shared infrastructure costs.
In November 2019 Nio Inc entered into a partnership with Mobileye, Intel’s Self-Driving car platform, to develop autonomous vehicles initially for the Chinese market and later for the global market. As part of the agreement Mobileye will design a self-driving system, which will be integrated into Nio‘s electric-vehicle consumer lines, along with Mobileye’s driverless ride-hailing services, as per a Company statement.
Nio, Inc (NYSE: NIO)
Market Cap: $2.6B; Current Share Price: 2.40 USD
Data by YCharts
The Global Electric Vehicle Charging Market is poised to reach USD 63.9 billion by 2025, growing at a CAGR of 32.6 percent, according to a report by Grand View Research, Inc. The growth of this industry is a result of the initiatives by governments around the world, in the form of tax rebates, grants, and subsidies for adoption of renewable and more environment friendly options for transportation. Unlike conventional vehicle which can only replenish their fuel at specific public locations, Electric vehicles can be charged at home or commercial charging stations.
However, the limitation of sufficient charging capacity to cover long distances discourages the use of these vehicles. There is an increased focus on research and development activities, especially in the passenger car sector, to improve infrastructure and supply equipment and establish EV chargers at easily accessible public places, to allow long distance travel as well. Range anxiety which acts as the biggest impediment for the market at present, will soon be a thing of the past, with Companies racing to develop connectivity modules.
The International Energy Agency predicts that the Electronic Vehicles which stand at 3 million today will grow to 125 million by 2030. The Global Electric Vehicle market is all set to compete with the internal combustion engine (ICE) vehicles in the next five year, accounting for one out of every five cars sold by 2030, according to Seth Goldstein, an analyst and chair of Morningstar’s electric vehicle committee. The growth of this industry is a result of the initiatives by governments around the world, in the form of tax rebates, grants, and subsidies for adoption of renewable and more environment friendly options for transportation. Unlike conventional vehicle which can only replenish their fuel at specific public locations, Electric vehicles can be charged at home or commercial charging stations.
A report by McKinsey estimates that by 2025, there will be more than 350 EV models introduced into the market, with ranges of 200 miles. However a lack of charging infrastructure could hamper the growth in the market. The report also highlights the fact that besides price and driving range, lack of access to charging stations is the third most serious barrier to EV. However, there have been a gradual decline in prices and improvement in driving range and companies are making a concerted effort to provide the requisite charging infrastructure. Furthermore the total energy demand for electric vehicles in China, United States and European Union alone will reach 280 billion kilowatt-hours by 2030.
There has been an increasing interest in EV’s owing to environmental concerns, which has prompted leading automobile makers such as BMW, Daimler, Ford, and Volkswagen to announce an investment plan for deployment of 400 charging sites across Europe. China and Japan are at the forefront of adopting this technology owing to increased awareness and emerging technology.
Nio Inc, a pioneer in the premium electric vehicles market, aims to be a change maker by exceeding customer’s expectation from an electric vehicle, and giving them freedom from mobility. To fulfill this vision, the Company has bought together world-class automotive and technology leaders together across its offices in Shanghai, Beijing, San Jose, Munich, London and six other locations.
The Company leverages its technology to create smart connected electric vehicles that offer leading-edge solutions in connectivity, autonomous driving and artificial intelligence. Furthermore the Company also offers convenient and innovative charging solutions and customer-focused service offerings.
The Company’s first product was an EP9 supercar, introduced in 2016 that offered superior acceleration and best-in-class electric powertrain technology. This was followed by the launch of ES8, its first volume manufactured electric vehicle, in June 2018. More recently the Company launched ES6, a 5-seater high-performance premium electric SUV, which began deliveries in June 2019. The Company’s models are equipped with NOMI, a voice activated AI digital car assistant, considered to be the most advanced system developed by Chinese Company.
Nio offers various charging options for its customers such as Power Home, a home charging solution; Power Express, a round-the-clock on demand pick-up and drop-off charging service and Power Mobile, its mobile charging truck solution. The Company has its own sales network consisting of NIO houses and a mobile app. NIO houses also double up as clubhouses with exclusive social events for customers
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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