Nio’s Onvo CEO, Shen Fei, has publicly criticized the trend toward ever-larger batteries in electric vehicles (EVs), calling it an inefficient use of resources in a market with increasingly reliable charging infrastructure. In a recent interview with Chinese media outlet The Paper, Shen argued that oversized batteries add unnecessary cost for consumers and manufacturers while occupying valuable cabin space. The statement comes as Nio aggressively expands its battery swap network, positioning the technology as a superior alternative to both traditional EVs and range-extended vehicles.
Battery Swapping as a Profitable Model
Nio is investing heavily in its battery swap infrastructure, aiming to double capacity by mid-2026 with over 8,000 new battery packs. This expansion isn’t just about convenience; Shen revealed a compelling economic rationale. The company intends to profit from electricity price arbitrage. By charging batteries during off-peak hours and swapping them into vehicles, Nio can generate significant revenue.
“In Zhejiang province, each battery in our swap stations earns roughly $0.17 per kilowatt-hour due to price differences,” Shen explained. “That translates to over $8 in daily profit per battery, or nearly $2,800 annually.” Nationwide, returns average around $1,680 to $1,820 per battery each year. This makes the investment highly profitable, especially given the long lifespan of modern battery packs.
Consumer Behavior Supports Smaller Batteries
Surprisingly, around 40% of Onvo L90 owners voluntarily downgrade from the standard 85 kWh battery to a 60 kWh option through Nio’s Battery-as-a-Service (BaaS) program. This is not just cost-saving ($504 annually in rental fees), but also reflects a decline in “range anxiety” as charging becomes more accessible. The trend challenges the industry’s race to pack more and more capacity into EVs.
Shen directly criticized the logic of larger batteries: “Adding bigger batteries is incremental. Battery swapping is systemic innovation.”
The Bigger Picture: Infrastructure Drives Choice
Nio currently maintains a vehicle-to-swap station ratio of 60:1. The company believes optimal station capacity is between 4 to 7 battery packs, ensuring adequate availability for varying customer needs. The core argument is simple: as charging infrastructure improves, the need for massive batteries diminishes.
Nio’s internal slogan, “Hybrids culminate in pure electric vehicles, and pure electric vehicles culminate in battery swapping,” highlights the company’s long-term vision.
The market is responding. Automakers are equipping hybrids with increasingly large batteries to offset charging limitations, with some models now exceeding the capacity of many full EVs. Yet, Nio’s data shows customers are willing to trade capacity for cost and convenience when viable alternatives exist.
Conclusion: Nio’s stance on battery size underscores a broader shift in the EV industry. As infrastructure matures, the focus is moving from sheer range to flexible, cost-effective solutions like battery swapping. This model not only offers financial advantages but also challenges conventional wisdom about battery technology.
