Chinese EV maker NIO has agreed to sell a 30% stake in its battery swapping and charging unit, NIO Power, to a subsidiary of Geely Holding Group.
The deal values NIO Power at approximately 16bn yuan ($2.38bn) post-money.
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The unnamed Geely subsidiary will subscribe for newly issued NIO Power shares.
It will pay with its 100% shares in Yiyi Internet Technology (Chongqing), which provides battery swapping services to the commercial mobility market, and 640m yuan in cash.
The transaction is subject to regulatory approvals and other customary closing conditions.
Once completed, NIO Holding (NIO China) will retain a controlling 63.6% of NIO Power.
Wuhan Guangchuang Emerging Technology Phase I Venture Capital Fund Partnership (Limited Partnership), an existing investor, will hold the other 6.4%.
The Geely subsidiary’s holding will be adjusted after closing based on certain operational milestones.
If NIO Power underperforms, the stake could fall to a minimum of 20%.
The Geely unit also has an option to invest another 640m yuan in cash, exercisable within two years of closing or by the time NIO Power signs binding agreements for a new financing round, whichever is earlier.
Excluding any post-closing adjustment, exercising it would lift the Geely stake to 34% and cut NIO China’s share to 60%.
In a concurrent transaction on the same conditions, NIO China will subscribe for newly issued equity in Haohan Energy, a Geely Holding Group subsidiary that runs a battery charging business.
Haohan Energy will use the cash to buy certain charging assets from NIO. NIO China will hold 10% of Haohan Energy on completion.
NIO and Geely Holding Group have also drawn up preliminary plans to adopt battery swapping technology and related services across consumer vehicle models and commercial mobility businesses of Geely Holding Group’s related entities.
Finalisation and implementation depend on further discussions between the two sides.
NIO said the transactions and initiatives show industry recognition of its battery swapping technologies, network and operational capabilities.
It added that working with industry players should help spread adoption of battery swapping, improve user experience, speed up electric vehicle penetration and release the long-term value of battery swapping.
