Nio (NYSE:NIO) announced a battery swapping and charging agreement with Lotus (NASDAQ:LOT), which Chinese car marker Geely (OTCMKTS:GELYY) controls.
The announcement was made at the annual Beijing Car Show.
This sent NIO stock up 3% on April 24, but it lost one-third of that gain overnight. The stock opened this morning at $4.15 per share, a market capitalization of about $8.6 billion. Geely has a market cap of $11.7 billion.
Big Brother Geely
Geely is the big brother in this deal.
The Chinese company had sales of $22.5 billion last year, three times the $7.67 billion achieved by Nio.
Geely owns a host of both gas-powered and electric vehicle (EV) lines and has stakes in others, including Mercedes-Benz (OTCMKTS:MBGAF). Its best-known brands in the U.S. are Volvo (OTCMKTS:VLVLY) and its Polestar (NASDAQ:PSNY) EV unit. Polestar has a factory in South Carolina and was taken public through a special purpose acquisition company (SPAC) in 2022.
Nio has been seeking alliances around the world for its battery swap technology, which differentiates it from other EV makers. Abu Dhabi now has a 20% stake in the company.
Nio is pinning its hopes on an export push driven by low-cost vehicles like the Onvo. It’s facing pushback from European regulators who want to slow the roll of all Chinese EV makers, including Geely.
Lotus is a British car name that Geely helped take public in New York in February. Lotus is pushing its own re-boot as a luxury EV brand with a dealer network in Saudi Arabia.
NIO Stock: What Happens Next?
As I wrote recently, the global EV market has many players. It can be hard to tell who is from where just from the name. Chinese companies like Geely will exploit this to enter the U.S. and Europe. Nio will be by its side.
On the date of publication, Dana Blankenhorn 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.
