Nio (NYSE:NIO) stock is accelerating higher following a promise from China’s National Development and Reform Commission (NDRC) to support investments in several industries, such as transportation, clean energy and infrastructure. As its name suggests, the NDRC works to develop and initiate national economic and social development policies to improve China’s economy.
This positive news comes after Nio held its 2023 Power Day event. During the event, the Chinese electric vehicle (EV) company revealed that it has installed 1,564 battery swap stations in China — a figure that could surge higher to 1,600 by as soon as this week. Some 1,012 of these stations have grid load shifting capabilities.
Next month, Nio expects to install its first third-generation battery swap station in Europe. By the end of the year, Nio forecasts having 50 battery swap stations in Europe.
Why Is NIO Stock Up 12% Today?
Nio also recently announced changes to its battery leasing program. Drivers who lease a battery from Nio will now be able to swap it with a higher density battery daily. Previously, these drivers were only allowed to replace the battery after months or years. For example, a driver with a 75 kilowatt-hour (kWh) battery can now exchange it for a 100 kWh battery for a fee of about $7 per day. The use case for this scenario seems to be for drivers who are taking extended trips or suffer from range anxiety.
Nio seems to be banking big on its battery swap program, as it was discussed heavily at Power Day. President Qin Lihong disclosed that Nio has provided over 80,000 battery upgrades in the past two years, while simultaneously improving safety and reducing energy waste. Safety is improved via a battery check each swap, while Nio’s battery swap station can reduce energy waste through vehicle interaction and grid load shifting.
To date, about 60% of all Nio vehicles receive their power from battery swapping stations. By the end of 2023, Nio has a goal of installing 1,000 new battery swap stations. The company believes it can also achieve this a month early.
Last Friday, JPMorgan analyst Nick Lai raised his price target to $9 from $8.50 and maintained a “neutral” rating on shares. NIO stock carries an average price target of $10.83 among all analysts tracked by TipRanks.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
