BEIJING: Chinese automakers Nio and Zhejiang Geely Holding Group said on Wednesday they had signed a strategic partnership agreement on battery swapping that would see them work together on standards, technology and model development.

The deal makes Geely, whose brands range from Volvo to Zeekr, the second automaker to sign a battery swapping partnership with Chinese electric vehicle maker Nio. Nio, which has been looking to lower costs, announced a tie-up with Changan Automobile last week.

Battery swapping allows drivers to replace depleted packs quickly with fully charged packs, rather than plugging the vehicle into a charging point. Geely and Nio will adopt a “co-investment, co-construction, shared, co-operative” model, the companies said.

They will look to establish an efficient battery asset management mechanism, build a unified battery swap operation and develop battery swappable vehicles compatible with each other’s battery swap systems, the companies added.

Nio has been looking to improve profitability. It has trimmed its workforce and deferred long-term investments to improve efficiency and reduce costs in the face of growing competition since US auto maker Tesla kicked off a price war at the start of the year.

Battery swapping could ease the strain on power grids at peak times when drivers recharge, but industry analysts and executives expect it would only become feasible if batteries become more standardised.

Volvo Cars braces for challenges in 2023 after quarterly profit falls

Nio, with a plan to nearly double the total number of such stations in China this year, is one of a handful of EV makers betting on battery swapping as a major power option for EVs.

In 2021, Geely said it aimed to set up 5,000 battery swapping stations for EVs globally by 2025.

Geely said it currently had 300 stations in operation and it would now continue to build stations alone as well as jointly with Nio.