Car companies are striving to be hybrid or overcharged. While various market segments are being fought, secret battles continue in the field of power exchange.
On June 13, NIO's first batch of fourth-generation power exchange stations was officially put into operation. Compared to the previous generation of power exchange stations, the power exchange speed is 22% faster, and the power exchange can be completed within 3 minutes. This is already very close to the fuel car refueling experience.
Another highlight of NIO's fourth-generation power exchange station is that it supports multiple brands to share power exchanges. Over the past six months, with the addition of car companies such as FAW and Geely, NIO's “Power Exchange Alliance” team has continued to expand. The launch of the fourth generation power exchange station is also the beginning of NIO's further expansion and implementation of the “Power Exchange Alliance”.
In addition to NIO's power exchange alliance, Ningde Times has reached cooperation with various partners on power exchange projects. “Power Exchange Alliances” seem to have been formed one by one, and they are speeding up their own industrial layout.
From questioning the exchange of electricity to scrambling to enter the market. Although there are still many problems to be solved surrounding power exchange stations, there is no doubt that a “land field campaign” in the energy transition process has already begun.
Warming up
China's power exchange circuit once attracted attention due to small-scale testing of the waters of car companies such as Changan and Geely, but it soon calmed down; Ningde Era launched EVOGO, a power exchange brand targeting the passenger car sector in early 2022, and launched an overall combined power exchange solution, but it has yet to grow into its “second growth curve.”
Since the end of last year, the electricity exchange circuit has heated up markedly.
Eight car companies, including GAC Group, Changan Automobile, and Geely Holdings, as well as energy and power companies such as Sinopec, CNOOC, and State Grid, have signed contracts with NIO in the power exchange business; Ningde Era also signed contracts with partners such as Didi and GAC Aian this year to speed up the layout of power exchange.
The launch of NIO's fourth-generation power exchange station has filled the craze. Compared with the previous three generation power exchange stations, the power exchange efficiency and service capacity of the fourth generation power exchange station have been greatly improved, while the construction cost of a single station has been further reduced.
At the launch ceremony on June 13, the Ledao L60 and NIO ET7 all completed a series of actions in about two and a half minutes, including reversing into storage, exchanging electricity, and vehicle self-inspection, saving 1 minute compared to the third-generation station.
The number of battery compartments also increased from 21 at third-generation stations to 23 at fourth-generation stations. Overall, the number of daily services on a single site in the fourth generation increased from 408 orders in the previous generation to 408 orders.
With the support of 4 vehicle-grade smart driving chips, the entire station's computing power reached 1016 TOPS. Plus 6 ultra-wide-angle lidars and 4 car-grade 8 megapixel cameras, the power exchange station is also more intelligent.
Yang Chao, assistant vice president of NIO Energy, revealed that with these sensors and computing power, the NIO power exchange station can support the autonomous power exchange function after leaving the car, so that car owners can automatically line up, exchange electricity, and automatically find a parking space in between buying a bottle of water. The autonomous power exchange function after leaving the vehicle is scheduled to be launched in the second half of 2024.
In terms of the construction cost of a single station, Yang Chao said that the construction cost for a first-generation power exchange is around 3 million yuan, while the construction cost for a fourth-generation power exchange station is less than 1.5 million yuan.
At the same time, fourth-generation stations have a wider range of support for models. It can service the NIO models that will be launched next year, and also supports the Ledao brand. Next, it will also be able to serve users who have joined NIO's Power Exchange Strategy Partner.
Of course, serving NIO's “Power Exchange Alliance” is a relatively long-term goal. What directly benefits is the Ledao brand, which is related to NIO's overall sales volume.
Li Bin, chairman of NIO Auto, once said that when Ledao can share NIO's third-generation and later power exchange stations, it can use more than 1,000 power exchange stations at the time of delivery. Nomura Securities, on the other hand, believes that the electricity exchange model may bring obvious help to the Rakudo brand. The brand's price range requires models that have no shortcomings in terms of space, energy supplementation, and price. In the past, pure electric models did not have a strong position in this market segment due to issues with refueling time.
Now, with the launch of the 4th generation station, Le Dao also has a stronger advantage in energy supplementation. Li Bin also said at this year's quarterly earnings conference that the construction of power exchange stations has significantly boosted automobile sales, and future power exchange station deployments will be adjusted more based on their effect on boosting sales.
This is also one consideration for NIO to launch its first fourth-generation power exchange station at Huadi Plaza in Liwan, Guangzhou. After intensive construction of power exchange stations in the Yangtze River Delta, NIO will continue to work hard in other regions to stimulate sales by improving the construction of energy supplementation networks.
According to NIO's plan, it plans to build 1,000 fourth-generation power exchange stations within 2024.
Breakup
The high investment in infrastructure construction such as power exchange stations, as well as the disproportionate return on investment, and doubts about profitability have made the power exchange model highly questionable in the industry. NIO has also been criticized by the market for this reason, believing that this has dragged down NIO's overall financial performance and is one of the factors behind NIO's delay in making a profit.
Now, NIO hopes to overcome this dilemma.
While the policy supports the “power exchange model,” they have become a “evangelist” and leader on the power exchange circuit through the continuous expansion of the power exchange circle of friends and the acceleration of technological innovation at power exchange stations. Even with the development of energy businesses such as power exchange, this business is expected to become an important source of revenue for NIO in addition to automobile sales.
In the fourth quarter of last year, sales of “energy solutions” and accessories accounted for 9.7% of NIO's revenue, while Li Bin expected revenue from the energy system to account for about 20% of NIO's overall revenue.
Automobile analyst Zhu Yulong analyzed that NIO Auto's ability to maintain the differentiated advantages of pure electricity is basically related to the power exchange infrastructure. Of course, the input-output ratio is currently a bit lower.
Shen Fei, senior vice president of NIO Energy, revealed that the break-even point for a power exchange station is 60 orders per day. At this time, expenses such as service fees and electricity are included to cover the operating and depreciation costs of the power exchange station. Currently, 20% of NIO's sites can surpass the break-even point.
This means that NIO needs enough users to use NIO's power exchange stations. This is also the reason why NIO needs more partners to join the “Power Exchange Alliance”. As can also be seen from their cooperation agreement, the scope of cooperation includes the formulation of power exchange standards, joint construction of power exchange networks, etc. If it goes well, the problems of standardization and high construction costs that hindered the development of the power exchange industry in the past will also be gradually resolved as cooperation is implemented.
At that time, NIO's accumulated technology in electricity exchange over the past 7 years will also be exported to the outside world, and the revenue and gross margin of its energy business will also improve as cooperation is implemented.
There is more room for imagination than that for power exchange stations. As energy storage equipment, power exchange stations can assist power grid peak frequency modulation and become an important component in power grid scheduling; many places are also piloting V2G (vehicle network interaction) to integrate the development of vehicles, charging stations, and power grids, and participate in scenarios such as virtual power plants and aggregation transactions.
According to the forecasts of CICC and other institutions, the policy is helping accelerate the implementation of the power exchange industry, including power exchange plant operators, battery banks, etc., and the overall market size will exceed 200 billion yuan in 2025.
Instead of just serving car owners in one direction, power exchange stations can play a greater role in future grid networks. With enough power exchange plant companies, it can also become an energy operation service provider in the future.
Similarly, at the end of May, NIO Energy received a strategic investment of 1.5 billion yuan from institutions such as the Wuhan Guangchuang Fund. Li Bin also said that in the future, NIO Energy will also have an independent financing plan, and will continue to open up financing in the future.
With the influx of partners and capital, NIO's electricity exchange business is also changing from a new phase to a lighter one. Currently, dozens of power exchange stations have also been built and owned by partners, joined the NIO network, and operated by NIO.
In the process of converting old and new energy, this can also be a very sexy story. As can also be seen from the current industrial layout of car companies, future car companies will no longer be limited to vehicle manufacturing, but will work in various fields such as software technology, platform licensing, and energy operation. The traditional boundaries between car companies and suppliers have been broken, and a new industry ecosystem is being formed.
This is also a new way for China to reshape the industrial chain and promote the development of the global automobile industry after gaining an opportunity in the new energy vehicle industry by leveraging its first-mover advantage.