Nio shares declined about 4% to $3.43, while fellow Chinese electric-vehicle maker XPeng also fell roughly 4% to $9.52. The declines came even as the broader U.S. market remained relatively steady, with the SPDR S&P 500 ETF Trust little changed.
The contrasting performance underscored continued pressure on Chinese electric-vehicle stocks, as investors assessed the implications of the agreement for Nio’s business model and its distinctive battery-swapping network.
Tesla, meanwhile, fell about 1% to $352.87, a comparatively smaller decline. The Global X Autonomous & Electric Vehicles ETF, which provides broader exposure to automakers, suppliers and technology companies involved in the electric and autonomous-vehicle industries, was also little changed.
Geely Gains Stake in Nio Power
The agreement was formalised at a signing ceremony on Monday and brings together two major Chinese automotive groups in an effort to expand battery-swapping and charging infrastructure.
Under the arrangement, Geely will contribute its Yiyi Power business and cash in exchange for a 30% interest in Nio Power. Nio China will retain a controlling stake in the subsidiary.
As part of the broader partnership, Nio China will also acquire a minority interest in Geely’s Haohan Energy charging business.
The companies plan to connect their respective charging networks while collaborating on battery-swapping technology and developing common standards for passenger vehicles.
Geely has also indicated that it will introduce consumer vehicles compatible with Nio Power’s battery-swapping network.
The partnership could potentially expand the number of vehicles using Nio’s network, while allowing the companies to share the costs associated with developing and maintaining charging and battery-swapping infrastructure.
Nio’s chief executive said at the signing ceremony that the arrangement could eventually be opened to other automakers, suggesting an ambition to make the company’s battery-swapping system a more broadly used industry platform.
Ownership Concerns Weigh on Nio
For Nio investors, however, the deal also raises questions about ownership of one of the company’s most distinctive assets.
Battery swapping has been a central part of Nio’s strategy and a key differentiator in its competition with other electric-vehicle manufacturers. Rather than waiting for a vehicle’s battery to recharge, drivers can exchange a depleted battery for a charged one at a dedicated station.
Giving Geely a significant minority stake in Nio Power means Nio will no longer have sole ownership of the business. That change may have contributed to the negative reaction in the stock market, as investors weigh the potential benefits of outside participation against the reduced ownership of the infrastructure.
At the same time, the partnership could provide Nio with additional capital and industry support to expand its battery-swapping network without having to finance all of that growth itself.
Nio has also argued that its charging infrastructure already serves vehicles from other manufacturers, making broader participation potentially valuable to the network.
If more automakers adopt compatible battery-swapping technology, Nio Power could gain a larger customer base and spread the cost of its infrastructure across more vehicles.
XPeng Joins Nio in Decline
XPeng was not directly involved in the Geely-Nio agreement, but its shares fell alongside Nio.
The move reflects broader investor sentiment toward Chinese electric-vehicle manufacturers, where developments at one company can influence perceptions of the wider sector.
The Nio deal could also prompt investors to examine how other Chinese EV manufacturers approach the expensive infrastructure required to support growing electric-vehicle fleets.
Nio faces a particularly important question because battery swapping is closely tied to the company's broader strategy. Any change in the ownership, financing or expansion of Nio Power therefore has implications beyond the subsidiary itself.
Investors Await the Next Phase
The market reaction leaves investors watching how quickly the partnership translates into practical expansion of battery-swapping infrastructure.
Key areas to monitor include the number of additional vehicles that become compatible with Nio Power, the pace of network expansion, the amount of capital committed by the partners and whether other automakers join the system.
The agreement ultimately represents a trade-off: Nio is giving up part of its ownership in its battery-swapping business while potentially gaining a deeper pool of capital, partners and vehicles that could use the network.
For Nio shareholders, the financial impact will depend largely on whether the broader network and additional participation create enough value to offset the reduced ownership of Nio Power.