The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Katrina Hamlin

HONG KONG, March 23 (Reuters Breakingviews) - Longer-range batteries that are faster to charge should benefit electric vehicle makers. But China's $13 billion Nio 9866.HK may be the exception.

At the time of Nio's 2018 New York listing, EVs often took up to eight hours to charge, and a typical battery lasted 300 km. To address this, Nio offered drivers the ability to exchange their depleted batteries in minutes at swap stations. The company also pioneered battery rentals, which can effectively reduce upfront prices by over 100,000 yuan, or $14,000 for current models.

Battery performance has improved since then. Now it's racing ahead. BYD 002594.SZ this month unveiled a fast-charging system that takes less than 12 minutes to go from 20% to 97%, reaching a driving range of 777 km (483 miles). The $130 billion automaker will also this year kickstart a scheme to expand its charging network to 20,000 stations in the People's Republic, versus Nio's nearly 4,000 swap facilities nationwide. New offerings from Contemporary Amperex Technology 300750.SZ are similarly impressive. This pace of progress suggests charging will soon take more or less as much time as swapping the battery.

Nio says it is committed to battery-swapping, but it may have a financial reason to ditch it. Building a fast-charging unit costs about 500,000 yuan, versus 3 million yuan for a swap station, Bernstein analysts reckon. That implies Nio has spent some $1.7 billion so far on its facilities, before batteries, rent and other maintenance costs. The company charges just 40 yuan per swap, plus energy costs. Bernstein reckons Nio's battery-swapping operations will be unprofitable until the company's average number of daily swaps per station doubles from current levels to 60.

That looks increasingly difficult given BYD and CATL's new power units. And pressure for boss William Li to match peers like Li Auto 2015.HK that have delivered an annual profit is rising. Although the three months to the end of December were Nio's first-ever quarter in the black, the company is forecast to lose $460 million this financial year, per Visible Alpha. Its stock trades at 0.7 times forecast 2026 sales, trailing rival Li Auto and Xpeng's 9868.HK multiples of 0.9 and 1.3 times. For Li, pivoting away from battery-swapping could help him find a faster lane.

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CONTEXT NEWS

Chinese electric-car maker Nio reported earnings of 283 million yuan ($40 million) for the three months to the end of December 2025, its first quarterly net profit on a GAAP accounting basis, according to filings on March 10. Total revenue rose 76% year-on-year to 35 billion yuan.

The company reported a 15 billion yuan net loss for the full year, narrowing by 33% from 2024, while total revenue rose 33% to 87 billion yuan.

Rival carmaker and battery specialist BYD on March 5 unveiled a battery that can charge from 20% to 97% in under 12 minutes to reach a range of 777 km (483 miles).

(Editing by Robyn Mak; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on HAMLIN/katrina.hamlin@thomsonreuters.com; Reuters Messaging: katrina.hamlin.thomsonreuters.com@reuters.net))