CATL Eyes Control of Nio Power: Pragmatic Investment or Strategic Turning Point?

I'm excited to share the second edition of China EV Pulse this week already – a sign that the project is gaining new momentum and attention. Going forward, you can expect at least one newsletter per week with curated and in-depth insights into China’s e-mobility developments and their relevance for Europe.

This won't just be a summary of news anymore – I aim to offer context, depth, and real value. Expansion is already in the works.

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Sebastian

CATL Wants Control of Nio Power – But Who Really Stands to Gain?

China’s battery giant CATL is reportedly in talks to acquire a controlling stake in Nio Power, the energy subsidiary of EV manufacturer Nio. While no official confirmation has been made, several sources suggest that CATL is pursuing the move not just for business synergy, but as a strategic play to dominate the battery-swapping segment in China and beyond.

Table of Contents

• Battery Swapping: Convenience with a Cost

• Beyond EVs: Battery Swap as a Power Asset

  • Let’s break that down with a detailed revenue exam …

• Europe: Testing Grounds for Grid-Linked Battery Sw …

• Who Benefits More: Nio or CATL?

Battery Swapping: Convenience with a Cost

Nio Power currently operates over 3,200 battery swap stations, mostly in China. These stations allow Nio drivers to replace depleted batteries with fully charged ones in under three minutes. This offers an alternative to plug-in charging, particularly for users with no home charging options or those seeking speed and convenience.

However, building and operating such a network comes at a steep price. Each station costs between 1.5 to 3 million yuan—or approximately $207,000 to $415,000 — to build, with additional ongoing expenses for maintenance, battery stock, and land use. While Nio generated $9.04 billion in revenue in 2024 (an 18.2% increase year-over-year), the company still reported a net loss of $3.11 billion that year. Over the past five years, its accumulated losses total more than $10.28 billion.

Selling a controlling stake in Nio Power could relieve some of that financial pressure —freeing up capital and shifting operational burdens. For CATL, meanwhile, the move would accelerate its own battery-swap ambitions under its EVOGO brand and potentially allow it to leapfrog competitors.

Beyond EVs: Battery Swap as a Power Asset

But this isn’t just about vehicles. When I spoke with Nio CEO William Li in Amsterdam last May, it became clear that battery swapping plays a bigger role in the company’s long-term strategy. Nio envisions its swap stations not only as infrastructure for EV users, but as key components of the broader energy transition.

These stations can serve as dynamic grid assets — absorbing power during periods of renewable surplus and supporting the grid during peak demand.

In China, 587 swap stations already participate in such grid services, with a combined load-shifting capacity of approximately 300,000 kilowatts.

Let’s break that down with a detailed revenue example:

1. Assumption 1: Capacity and Usage

   • Total capacity involved: 300,000 kW

   • These stations are used for one hour per day to shift load.

2. Assumption 2: Compensation

   • Compensation rate: 0.1 Yuan per kilowatt-hour = $0.0137 USD

3. Daily Revenue:

   • 300,000 kWh × $0.0137 = $4,110 per day

4. Monthly Revenue:

   • $4,110/day × 30 days = $123,300 per month

5. Annual Revenue:

   • $123,300 × 12 months = $1.48 million per year

This is based solely on grid services from the 587 participating stations. Now let’s estimate potential earnings if all 3,200+ stations were enrolled in similar programs:

• Average load per station: 300,000 kW / 587 = ~511 kW

• 3,200 stations × 511 kW = 1.63 million kW total capacity

• 1.63 million kWh × $0.0137 = $22,331 per day

• Monthly: $670,000

• Annually: $8.04 million

These are conservative estimates based on just one hour of usage per day and don’t include potential income from grid frequency stabilization or dynamic market pricing. Also excluded: subscription fees for battery packs, which are a core part of Nio’s revenue model.

Europe: Testing Grounds for Grid-Linked Battery Swap

This concept is no longer theoretical in Europe. In Denmark and the Netherlands, Nio is already conducting frequency-balancing tests, where swap stations absorb surplus renewable power during low-demand periods. In return, the company receives payments from national grid operators. While such models still face regulatory hurdles in markets like Germany, other countries may advance more quickly, especially where renewable energy integration is accelerating.

According to Nio, a swap station becomes profitable with 60 to 70 swaps per day—a benchmark that’s regularly exceeded in Chinese urban hubs like Shanghai. And that’s without factoring in revenue from energy market participation. Nio VP Shen Fei confirmed that many locations already operate profitably, and future grid support could improve margins further.

Who Benefits More: Nio or CATL?

CATL’s motivations likely go beyond short-term earnings. As the world’s largest EV battery supplier, CATL might see this as a strategic foothold to standardize battery formats across brands and use its swap infrastructure as a gateway to secure long-term battery supply deals.

But for Nio, the risk is losing control of one of its most visionary assets. The swap network is not just a differentiator—it’s a potential goldmine as energy storage, decentralized grid support, and EV infrastructure converge. In an increasingly electrified and renewable-powered world, controlling distributed, intelligent, bi-directional energy hubs could be more valuable than selling cars.

So while a sale might solve near-term financial headaches, it may also mean giving up future strategic upside.

My take? Nio should think twice before letting go. What looks like a bailout today could be the backbone of tomorrow’s clean energy economy.

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_{Sources: CarNewsChina - CATL in talks to acquire Nio Power’s battery-swapping network / InsideEVs - China's Biggest Battery Maker May Buy Nio's Battery Swapping Network / pandaily - CATL Reportedly in Talks to Acquire NIO’s Battery Swap Division / Elektroauto-News - William Li, Nio über Zukunftsvision für Europa / CNEVPost - Analysts expect Nio's battery swap business to break even by end of 2026 / Integral - Dilemma & Opportunity: The present and future of NIO's swapping stations in China / Automobilwoche - Schwacher E-Auto-Absatz: In der Not wird Nio erfinderisch}