Longer-range, fast-charging batteries are set to benefit most electric vehicle makers, but China’s Nio may be an exception.

When Nio listed in New York in 2018, EV charging could take up to eight hours and battery ranges were limited to around 300 km. Nio introduced battery swap stations that allowed drivers to exchange depleted batteries in minutes, and pioneered battery rentals to reduce upfront costs by over 100,000 yuan ($14,000).

However, battery technology has advanced rapidly. BYD recently unveiled a fast-charging system that reaches 97% capacity from 20% in under 12 minutes, providing a driving range of 777 km (483 miles). The company plans to expand its charging network to 20,000 stations, compared with Nio’s nearly 4,000 swap facilities. New power units from Contemporary Amperex Technology (CATL) are similarly advancing the pace. Analysts note that fast-charging now approaches the speed of swapping, undercutting one of Nio’s key differentiators.

Nio faces financial pressures in maintaining its swap network. A fast-charging unit costs about 500,000 yuan, while a swap station costs roughly 3 million yuan, with Bernstein analysts estimating that Nio has spent around $1.7 billion so far on swap facilities, excluding batteries, rent, and maintenance. At 40 yuan per swap, the operations remain unprofitable, and daily swap usage would need to double to 60 per station to break even.

Despite these challenges, Nio reported its first quarterly net profit of 283 million yuan ($40 million) for Q4 2025, with revenue rising 76% to 35 billion yuan. Still, the company posted a 15 billion yuan net loss for the full year, narrowing 33% from 2024, with total revenue up 33% to 87 billion yuan. Analysts forecast a $460 million loss for the current financial year, and Nio’s stock trades at just 0.7 times forecast 2026 sales, below rival Li Auto (0.9x) and Xpeng (1.3x).

With competitors like BYD and Li Auto delivering fast-charging solutions and annual profits, pressure is mounting on CEO William Li to pivot the business. Shifting away from battery swapping could provide Nio a path to faster profitability and more competitive positioning in China’s rapidly evolving EV market.