Chinese EV major NIO (NYSE:NIO) (HK:9866) is teaming up with CATL to produce EV batteries that can last for up to 15 years. Contemporary Amperex Technology (CATL) is a prominent battery maker in China.
The current norm in China require batteries with a warranty span of about eight years or 120,000 KM mileage. NIO and CATL are aiming for nearly double the warranty standard. Importantly, batteries account for a significant portion of an EV’s pricing. Consequently, companies are constantly looking to develop batteries that can pack more power density at a lower cost.
The two companies did not provide a production timeline for the new batteries. NIO has focused on developing a massive battery-swap infrastructure. The company currently has over 2,300 battery swap outlets. It plans to ramp up this number to nearly 3,310 this year. While consumers can buy NIO’s vehicles, they need to rent a battery from the company.
Future Plans for NIO
Separately, NIO plans to launch its second brand, Onvo, in May. The brand will be focused on the family car market. Larger-scale deliveries of the first Onvo vehicle are anticipated to begin in Q4. The company plans to bring the second Onvo vehicle, an SUV, to market in 2025.
Is NIO Stock Expected to Rise?
NIO shares are trending nearly 4% higher today. However, liquidity concerns and cut-throat competition in China’s EV market have pushed the company’s shares nearly 46% lower over the past six months. Overall, the Street has a Moderate Buy consensus rating on NIO alongside an average price target of $7.09. This points to a nearly 27% potential upside in the company’s share price.
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