Among the new forces in the automobile industry, NIO holds a special place as a leader and innovator. While initially a success and favorite of stock investors, the company, however, continues to lose money in the TO-C field. This is offset by its offering of good service. NIO’s story shares some similarities with the Tesla success story though the two differ in different ways, most interesting to note in the area of power replacement.
Excellent service forms the core of Tesla’s market success, belying the fact that the batteries it uses cannot be repaired after-sales. The asynchronous motors from Baodao Taiwan have been replaced by in-house permanent magnet synchronous motor core components made by mainland suppliers, and the Panasonic power battery it uses is far from perfect. A nickel-cobalt-aluminum battery provides a good cruising range though inconsistent. Once a problem in encountered, the faltering group is replaced in lieu of repairs.
NIO’s practice follows Tesla’s with a slight difference. The company has rectified an earlier mistake on its battery packs that may lead to spontaneous combustion; users also have been freed from worries regarding what may happen to the CATL nickel-cobalt-manganese-battery pack. Already made more stable, the pack is rendered even more stable after the addition of the substation mode. The replacement battery pack adds to the operation costs
Power stations replacement is not universal
With two mass-produced vehicles, it is possible to run NIO Automobiles in the power exchange mode. However, it is not feasible to expand the service to include the entire industry. For power stations meant for public users alone, there are some 50 models of mainstream brands with some 10 battery packs to be allotted for each car. The operating cost will be astronomical, calculations made for power plants and hardware investments to cater to the general public are estimated at a whopping 50 million.
This requirement for huge investments means the impossibility of large-scale popularization of power exchange stations. More prudent measures to take could include the use of the overhead contact network for wired roach charging for medium- to large-sized cars, and the use of lithium iron phosphate batteries for increased cruising range. NIO’s replacement strategy, therefore, is just a marketing tool intended to keep its stock prices high. What benefit it does in the long-term remains to be seen.