On the morning of September 28, NIO Inc. (NIO) announced that it has entered into a formal agreement with Geely Automobile Holdings Ltd. (00175) for a strategic transaction covering battery swapping and charging operations. Under the deal, Geely Auto will subscribe to newly issued equity in NIO Power using 100% equity of its subsidiary Yiyi Interconnect plus 640 million yuan in cash as consideration.

Upon completion, Geely Automobile Holdings will hold a 30% stake in NIO Power. Based on this calculation, NIO Power's valuation reaches 16 billion yuan. William Li, founder, chairman and CEO of NIO, said in an interview that "the significance for the industry is that everyone needs to think about which aspects each company should treat as its core competitiveness, and which areas need to be pursued through industry-wide cooperation. I believe this matter is very important."

Li Shufu, chairman of Geely Automobile Holdings, stated that proactive collaboration, especially collaboration at the capital level, is essential to genuinely build up China's new energy vehicle — or intelligent electric vehicle — infrastructure, unify charging and battery swapping standards, reduce duplicative investment, and maximize social benefits. William Li also made clear that after the partnership, both the battery swapping network and the charging network will be open to the entire industry, and he looks forward to peers joining as well.

In terms of global expansion, this cooperation also carries strategic significance. It was noted that if Chinese companies expand overseas to Europe and other regions, they will similarly face the problem of redundant construction. William Li responded that this would certainly lead to a significant drop in efficiency. Li Shufu said, "If we turn the standards and network for charging and battery swapping infrastructure into reality within China, then with standards, manufacturing, products, and operational experience in place, when we go global, charging and battery swapping will go global together."

It was argued that curbing domestic involution and accelerating infrastructure development is a very good strategy for Chinese automakers going global. William Li agreed: "I think it's a very realistic choice, and after all, we are all running businesses — we are not cooperating for the sake of cooperation." Li Shufu emphasized, "We must be together, with the least investment and the best results. The starting point for everything is the entire country's automobile industry, not simply for one particular company."