NIO Stock Alert: Nio inks battery deal with GAC

Nio (NYSE:NOK) The stock plunges 5% today despite a new deal with another Chinese automaker GAC To establish battery-changeable cars and battery-changing stations that are cross-compatible between both vehicle brands.

Nio and GAC signed the strategic cooperation agreement in Guangzhou today, May 8th. GAC is headquartered in Guangzhou, China.

“The collaboration will strengthen the two companies’ respective strengths in technology and operations and advance the unification of battery standards and operational and management systems to make the exchange a more accessible solution and provide users with the most hassle-free refueling experience possible,” Nio said -Founder and CEO William Li.

The agreement will achieve a certain level of battery standardization between the two car brands to improve the efficiency of life cycle battery management for both brands’ vehicles.

By the end of May, both Nio and GAC will share data so customers can find charging stations across both companies’ networks.

“With the growing number of electric vehicles, battery switching will open up unlimited market opportunities in the future, especially in cities. Because it actually solves a problem for many users who do not have their own parking space,” said Feng Xingya, President of GAC Group. “The strategic cooperation agreement that we signed today is also the basis and orientation for our future cooperation. Based on this, we hope to build more battery swapping stations that will provide our GAC Aion users with a better swapping experience.”

NIO stock slides despite promising battery deal

While the partnership should bring significant benefits to both Nio and its customers, investors are clearly somewhat uninterested in the news.

In fact, at the time of writing, NIO stock is down more than 5%, adding to the company’s losses this year. Nio is one of several notable losers in the EV space so far in 2024, reflected in poor stock performance. NIO is down nearly 40% year-to-date (YTD).

At the time of publication, Shrey Dua did not hold, directly or indirectly, any positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication policies.