Emerging technology stock pick: 3-minute battery changes
This global company is removing the battery from electric vehicle price tags.
Mentioned: NIO Inc (NIO)
Andrew Willis: In the recent “10 for 2023” report from Sustainalytics, Martin Vezér and Poulomi Sengupta combed through Pitchbook and Sustainalytics to find you electric vehicles that only take a few minutes to ‘fill up’.
Following last week’s featured EV company innovating in the battery space with a clever partnership, we have a competitor that’s rethinking the battery business. Chinese luxury car maker NIO (NIO) is pioneering what’s called ‘battery swap technology’, where vehicles receive a different battery at each visit to the station.
By removing ownership of the battery, and instead turning it into an app-based service, the company has reduced the price tag of its cars by 15 to 30%. And according to Morningstar analyst Vincent Sun, within the next two years, the company looks to build over 4,000 swap stations in China and another 1,000 outside of the country.
Amidst the rapid growth for Nio, there are some safety concerns, however, with Sustainalytics rating product governance at the company as a “severe risk”. The report says Nio currently doesn’t disclose who’s responsible for product and service safety in management, nor does the company share external quality certifications. At the same time, Nio can bring a car from announcement to delivery in the same quarter.
Investors that would prefer low product governance risk in their portfolio should consider next week’s company – and its life-changing drug now approved in more than 40 countries and regions worldwide.
For Morningstar, I’m Andrew Willis.