NIO unveils ambitious plan to expand charging and battery swap stations across China

NIO (NYSE:NIO) shares are struggling to turn positive on Tuesday as the company’s ambitious plans to extend charging stations has been overshadowed by a downward trend in Chinese stocks. Losses were triggered after China’s central bank kept interest rates unchanged despite the need for additional stimulus, and as Chinese exchanges recently discontinued the daily release of real-time data related to foreign fund flows, further extinguishing overseas demand.

These developments are weighing on shares and preventing NIO (NIO) from capitalizing on its plan to invest in charging and battery swap stations across China to increase the adoption of electric vehicles.

At its Power Up 2024 event, NIO (NIO) unveiled its “Power up Counties” plan to have a battery swap station in more than 2,300 counties in 27 provincial-level administration regions in China by the end of 2025 and charging networks in all counties by the end of next June.

Currently, the company has 2,480 battery swap stations in China, as well as 2,322 supercharging stations with 10,577 charging piles and 1,627 destination charging stations with 12,432 charging piles.

As part of the initiative, NIO (NIO) will build a battery swap station manufacturing facility in Wuhan, targeting an annual capacity of more than 1,000 battery swap stations.

Beginning in 2026, NIO (NIO) plans to extend coverage in the remaining provincial-level administrative divisions.

The “Power Up Partner Plan” invites partners to jointly build and share the profits of charging and swapping stations. At the event, at least 7 Chinese companies pledged to jointly expand the recharging network for new-energy vehicle, or NEV, users.

NIO (NIO) is China’s third-largest EV maker after BYD Company (BYDDY, BYDDF) and SAIC Motor Corp. In July, the company delivered 20.5K vehicles, bringing its year-to-date total to 107.9K, a 44% increase year-over-year.

But despite the impressive sales figures, the stock continues to struggle and has lost 55% in value since the beginning of the year versus a 4% gain for BYD (BYDDY, BYDDF). NIO (NIO) suffers from an inability to generate a profit despite increased revenue, raising doubts whether the company can continue given its accelerated cash burn.

NIO (NIO) shares were down ~5% on Tuesday, continuing to trade below the 50-, 100-, and 200-day moving averages.