NIO and Geely finalize strategic battery

NIO has agreed to sell a 30% stake in its battery swapping and charging unit, NIO Power, to a subsidiary of Geely Holding Group. The deal values NIO Power at approximately 16 billion yuan ($2.38 billion) post-money.

Payment for the stake includes 100% ownership of Yiyi Internet Technology (Chongqing), a company providing battery swapping services to the commercial mobility market, plus 640 million yuan in cash. After completion, NIO Holding will retain a controlling 63.6% stake in NIO Power. Wuhan Guangchuang Emerging Technology Phase I Venture Capital Fund Partnership will hold the remaining 6.4%.

Concurrent investment in Haohan Energy

In a parallel transaction, NIO China will subscribe for newly issued equity in Haohan Energy, a Geely Holding Group subsidiary that runs a battery charging business. NIO will pay cash for a 10% stake in Haohan Energy.

The proceeds from this subscription will be used by Haohan Energy to purchase certain charging assets from NIO. This cross-investment creates a reciprocal financial and operational link between the two companies' infrastructure arms.

Strategic alignment on battery swapping

NIO and Geely Holding Group have drawn up preliminary plans to adopt battery swapping technology across Geely's consumer vehicle models and commercial mobility businesses. Those plans remain subject to further discussion.

NIO stated that the transactions and initiatives show industry recognition of its battery swapping technologies, network, and operational capabilities. The company added that working with industry players should help spread adoption of battery swapping, improve user experience, speed up electric vehicle penetration, and release the long-term value of the technology. Battery swapping has long been one of Nio's core advantages.

Terms, conditions, and outlook

The transaction is subject to regulatory approvals and other customary closing conditions. Approval is another open item for Nio.

Geely's 30% stake may be reduced based on NIO Power's performance against undisclosed operational milestones. If NIO Power underperforms, the Geely subsidiary’s stake could fall to a minimum of 20%.

The Geely subsidiary also holds an option to invest an additional 640 million yuan in cash within two years of closing or by the time NIO Power signs binding agreements for a new financing round, whichever is earlier. Exercising this option would increase the Geely stake to 34% and reduce NIO China’s stake to 60%.

Completion of the deal depends on securing regulatory clearances and satisfying customary closing conditions.