For EV companies like Nio Inc. (NYSE:NIO), operating charging and battery-swapping networks offer many benefits. Battery swapping can reduce recharging times, while Nio’s battery-as-a-service model can also lower upfront vehicle purchase costs. The charging infrastructure is also a revenue stream in its own right. It also contributes to building brand loyalty.
That brings us to the battery-swapping deal Nio has struck with Geely, announced on September 28. The EV companies have joined forces to expand their charging networks. For Nio, that means getting a helping hand to broaden and improve the economics of its charging infrastructure. For a deeper dive into Nio’s latest financials, see: Nio (NIO) Narrows Its Losses, But Can It Keep This Up?
Geely Brings the Money and Portfolio
Nio Inc.’s power solutions span battery swapping, destination charging, home charging, and mobile charging. Its Power Cloud platform connects these services and helps users locate and access charging and swapping resources. Comprehensive power solutions are part of Nio’s integrated user ecosystem and contribute to the company’s competitive advantages.
The Geely deal could strengthen that advantage. Geely is bringing RMB640 million in cash alongside its Yiyi Power battery-swapping business to Nio Power, Nio’s power solutions unit. The transaction would give Geely a stake of 30% in the unit, as Nio retains a controlling stake of 63.6%. Additionally, Geely plans battery-swappable vehicles that will use NIO Power’s network, and the companies intend to develop unified swapping standards. The deal also runs in the other direction: Nio will acquire a 10% stake in Geely’s Haohan Energy charging business, which will purchase certain charging assets from Nio.
That arrangement would enable Nio to share the financial burden of expanding the charging infrastructure. At the same time, it opens a path for Nio to increase network utilization for more power solutions and potentially improve network economics more quickly by spreading infrastructure costs across more users.
Nio’s power-solutions revenue increased to RMB2.46 billion in 2025 from RMB2.10 billion in 2024 and RMB1.67 billion in 2023. Although the business represents only 2.8% of Nio’s total revenue, it has more room to grow and achieve better profitability as the network expands.
Nio Power currently has just over 4,100 swap stations. It aims to have 10,000 swap stations by 2030. Geely targets to expand its network to more than 22,000 charging stations by the end of 2027.
More Work to be Done, Nothing Settled Yet
The caution is that Geely’s consumer battery-swapping plans are still subject to further discussions. So the expected utilization benefits are not guaranteed.
Also, network utilization may not improve fast enough to offset rising infrastructure spending. That means that at this point, the power business remains an investment rather than a proven high-margin operation. In 2025, Nio Inc.’s power-solutions costs increased by RMB461 million, as depreciation and operating expenses rose with network expansion.
Valuation Discount Reflects Both Risk and Opportunity
Nio Inc. traded at about 0.52x trailing sales in September, versus 0.87x for XPeng, and 0.80x for BYD. On the EV/Revenue basis, Nio traded at about 0.42x, compared with 1.11x for XPeng, and 0.92x for BYD.
Both multiple show Nio trading at a steep discount compared to peers. Still, these multiple alone do not establish that Nio is undervalued because they do not reflect that Nio remains a loss-making company.
The question is whether the Geely partnership can help Nio convert the expanded network into better utilization and stronger returns.
Investor Positioning Offers Mixed Signal
Nio Inc.’s latest hedge fund positioning shows mixed signals. At the end of Q2, 27 funds held Nio stock, down from 31 funds in the previous quarter. D.E. Shaw cut its position by 53%, but Renaissance Technologies increased its stake by 12%. Short interest in the stock increased to 5.7% from 5.3%. The roughly 139 million shorted shares have about three days to cover.
The Geely deal gives Nio’s power business both a funding and utilization boost. If that translates into better power economics, the benefit could be felt on Nio’s consolidated financial performance. Geely improves the odds that Nio’s battery-swapping network can become economically viable, but the business still needs higher utilization and better profitability before investors can say the strategy has finally paid off.
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