Translation

Author: Chris Zheng

On July 9, 2021, NIO held its Power Day 2021. In this era of electrification, more and more car companies are hosting events related to electrification. Tesla has its Battery Day, Volkswagen has its Power Day, and on the same day as NIO’s Power Day, Stellantis hosted its EV Day.

However, unlike other events, NIO’s Power Day focused more on NIO Power, its energy service system. Due to the unique element of “battery swapping”, NIO Power has been subject to excessive attention and questioning from the public.

NIO Power is not just about “battery swapping”. So, how should we view NIO Power?

“Full-scene is our focus”

Since the first NIO battery swapping station was put into operation in the Shenzhen Nanshan Science and Technology Park on May 20, 2018, NIO Power has been in operation for just over 3 years.

Following international practice, NIO also looked back at its “achievements” of the past 3 years as of July 10:

• 304 battery swapping stations
• 208 supercharging stations with 1618 supercharging piles
• 385 destination charging stations with 2151 destination charging poles
• Over 500 mobile charging cars

Why emphasize “as of July 10”? Because today, NIO put ten new swapping stations into operation, bringing the total number of swapping stations to over 300.

In addition, NIO announced that it will increase its target number of battery swapping stations for 2021 from 500 to over 700, and add 600 new stations annually in the Chinese market from 2022 to 2025. By the end of 2025, the total number of battery swapping stations will exceed 4000, including over 1000 overseas.

Actually, the above data can already explain some issues. Undoubtedly, battery swapping stations are the most differentiated energy supply facilities in the NIO Power system, but are they NIO’s most important energy supply facility or its absolute mainstay?It seems not a pure mathematical calculation. As of now, the scale of NIO Power’s supercharging stations has reached 67% of the total number of battery swap stations. Another significant investment is a mobile charging fleet consisting of 500 vehicles and related maintenance personnel, which is in operation nationwide. You may find a problem: NIO’s investment in NIO Power is not really focused, which undoubtedly increases its operational complexity. Why is this so?

The uniqueness and topic of “battery swap” have attracted unequal media and public attention. Such firepower, whether it is consistent with the original intention of NIO Power’s design or the comparison of NIO car owners’ energy replenishment experience in different scenarios today, is obviously mismatched.

We may need to listen to what NIO has to say.

In the company’s official rhetoric, NIO Power is defined as an energy service system that provides users with full-scenario energy replenishment services through NIO’s mobile charging vehicles, charging stations, battery swap stations, and road service teams relying on NIO’s energy cloud technology.

NIO’s CEO William Li Hongqi said yesterday: “Full-scenario is the key point of our presentation today.” What is a “full-scenario”? Let’s take a look at the PPT behind Li Hongqi at the time.

In my opinion, these two PPT slides fully present NIO’s positive thinking on energy replenishment for pure electric vehicle users.

Breaking down a scenario where a pure electric vehicle needs energy replenishment, the finer the granularity, the more paths need to be solved, and the resulting system-based solution will be more complex.

Li Hongqi said: “We can create a matrix when we have the range of travel and time of stay. List all the scenarios where users need energy replenishment. When the travel and energy replenishment scenarios of 10,000 or 100,000 owners are added up, it is the user’s actual (energy replenishment) scenario, and it cannot be outside of this scope.”

For example, in the urban scenario where the stop time is greater than 4 hours, the exclusive 7 kW peak power charging station (home charger) has no difference in energy replenishment experience compared to the battery swap station that completes a swap in an average of 7-8 minutes. Only in the intercity scenario where the stop time is less than 1 hour can the battery swap station demonstrate its “rapid replenishment” value.

What NIO Power needs to do is to break down NIO users’ energy replenishment scenarios into unlimited details and provide corresponding solutions for each segmented scenario. Therefore, going back to the previous question, why is NIO Power’s investment layout not focused at all? Because users’ energy replenishment scenarios are originally extremely diverse.First of all, before and after NIO, many manufacturers have made similar considerations. For example, Tesla has 938 supercharging stations and 1303 destination charging stations in China. Also, the Voyah FREE car has developed both extended range and pure electric versions, with a difference of over 300 km in single charge range, and the convenience of power supplement is completely different. This clearly corresponds to the product layout of different user power supplement needs.

The difference is that NIO Power is more finely divided. In addition to supercharging, NIO has also developed an average of 7-8 minutes to complete one complete power supplement exchange, and the currently unique decentralized power supplement method–mobile charging cars.

“When 800V Arrives”

When the disruptive supercharging technology appears, will NIO’s battery swapping technology be disrupted?

Let’s return to the facts to discuss this issue. According to the previous article, comparing the total investment of NIO Power’s battery swapping stations, supercharging stations, destination charging stations, mobile charging cars and operation costs, the proportion of battery swapping stations is likely to be less than 50%.

Therefore, our first conclusion is that the disruptive supercharging may overturn battery swapping stations, but the entire NIO Power system will not be completely overturned. In the worst case, it will only be overturned less than half.

Next, let’s discuss the disruptive supercharging. The gradually clear supercharging route currently consists of two routes: the nearly 700 A large current route led by Tesla and the 800 V high-voltage route led by Porsche. This corresponds perfectly to the physical formula P (power) = U (voltage) I (current).

This is also why Tesla has long reserved 900V high-voltage technology, and many manufacturers including NIO, Polestar, TELD and GAC Aion are all deploying liquid-cooled high-current lines. On the road to ultimate supercharging, high voltage and high current are two unavoidable obstacles.

Returning to the topic, when the voltage platform is raised to 800 V and the current is raised to 600 A, will the peak power of 480 kW supercharging overturn battery swapping?

Yesterday, Qin Lihong and Shen Fei, Vice President of NIO Power Management, answered this question in the QA session and talked about many additional advantages of battery swapping.

For example, it provides a foundation for continuous battery upgrades for users after picking up their cars, and battery swapping stations occupy smaller land areas than supercharging stations with the same power supplement service capacity (measured in units of charging volume/day), etc.However, we need to focus on the question at hand: With the commercialization of 480 kW peak power ultra-charging, will NIO’s battery swapping technology be disrupted?

The answer is, it’s difficult.

According to data from NIO’s swapping stations, it takes an average of about 7-8 minutes to swap out a depleted battery for a fully charged one. Even with a 480 kW fast charger, it’s very difficult to replenish 90%-95% of the battery capacity within 8 minutes. This is a pure comparison of the efficiency between single vehicle battery swap and fast charging experiences. As higher power fast chargers become more prevalent in the future, the efficiency of the fast charging experience may approach that of battery swapping, but it will be difficult to surpass.

As for multi-vehicle battery swapping, which refers to the comparison of single station battery swapping capacity, it’s not complicated either. With ultra-charging stations going from an average of less than 90 kW to 480 kW, single station battery swapping capacity has been improved.

The essence of a battery swapping station is n battery packs and fast charging poles, so improvements can be divided into two directions: First is to increase the capacity of a single station battery pack, which has already been implemented with NIO’s second generation stations having 13 battery packs instead of the 5 in the first generation stations. Second is to increase the power of fast charging poles. Does NIO have this capability?

Aside from the current maximum 180 kW NIO ultra-charger, Qin Lihong stated at the event that NIO is currently researching chargers with even higher power and current, with three models or more being developed.

Therefore, whether it’s 800 V or 600 A, as long as the emerging fast charging technology is part of NIO’s technology stack, and the upper-layer applications built on this basic capability – ultra-chargers and battery swapping stations – continue to iterate, it will be difficult to disrupt NIO’s battery swapping technology.

“Solar-Powered Flashlight” and User Enterprises

After introducing all the products and technologies at the press conference yesterday, Qin Lihong recalled “a past experience.”

He referred to September 2018, when a group of NIO users from Guangzhou and Shenzhen wanted to drive their ES8 to Xinjiang, except NIO had not yet deployed swapping stations or ultra-chargers in Xinjiang at that time. Therefore, the scene on Qin Lihong’s PPT was created: NIO used three mobile charging units to replenish the ES8 for the trip, with three transport trucks carrying the mobile charging units to complete the entire journey.

NIO Power’s goal is for electric vehicles to go everywhere that gasoline vehicles can go. To achieve this goal, gasoline vehicles can carry the energy needed for electric vehicles to travel long distances.Qin Lihong was very polite in his presentation on the scene, saying that NIO was “criticized very harshly” at that time. The most widely circulated satire at that time was that NIO had concocted the invention of the solar-powered flashlight by Leonardo da Vinci in the film “Chinese Ling Ling Qi” directed by Stephen Chow.

The reason why this matter caused the most extensive discussion at the time, both internally and externally, is that it did indeed to some extent test NIO and tested the values that NIO upholds.

We all know that the establishment of NIO was originated from the visionary ambition of its founder, William Li, who was full of blue sky for NIO. The meaning of “NIO” also comes from the English “Blue Sky Coming.”

On the other hand, what William Li repeatedly told users at the 4th NIO Day, in IPO prospectuses and 10-k filings, was that NIO’s mission was to create a reserved lifestyle by providing high-quality smart electric vehicles and becoming the best user company. NIO is committed to becoming the company with the highest user satisfaction in the world.

The essence of the 2018 Xinjiang Tour lies in the conflict between the source of NIO’s establishment and its mission to provide a high-quality user experience. For any company, this is a moment that requires difficult choices and will ultimately be written into the memoirs. This may also be the reason why Qin Lihong took the initiative to mention it after three years.

In the end, we have seen NIO’s management decision, which is to prioritize user satisfaction. Qin Lihong said, “We decided to use all means to meet the needs of users, hence this scene.”

Of course, the “bright side” is that today’s NIO is different from the past. The service capabilities of NIO Power are better than ever before. Qin Lihong even demonstrated on the stage what would happen if the same route was taken three years ago, and how NIO Power could allocate resources more efficiently to guarantee user experience.

At the end of the entire press conference, Qin Lihong once again mentioned NIO Power’s controversial work goals of “making recharging more convenient than refueling” and “making electric vehicles go everywhere gasoline vehicles can go.” After three years of persistence, NIO is becoming more determined today: “We are taking step-by-step with our own rhythm and way towards this goal.”

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.