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Sources say that CATL is in talks with Nio to purchase a controlling stake.

Four people familiar with the matter said that Chinese battery giant CATL was in negotiations to purchase a controlling interest in Nio's Power Unit, which operates more than 3,000 battery exchange stations in China.

The sources said that CATL made this proposal after it announced a maximum investment of 2.5 billion yuan (342 million dollars) in Nio Power in March. They asked to remain anonymous because the talks have not been made public.

Sources did not disclose how much CATL offered under the proposed agreement. One of the sources said that Nio Power was valued at over 10 billion yuan in a fundraising round for 2024.

CATL refused to comment when contacted about the proposal.

Nio didn't directly answer questions about a possible deal, but it said that the company was promoting a joint construction of battery exchange stations "with multiple stakeholders, including CATL".

Nio responded to a comment request by writing, "Nio will continue to deepen its collaboration with CATL on business and capital matters and consolidate their strategic partnership in order to build together the largest battery swapping networks globally."

CATL has increased its investments in battery swapping centers as Chairman Robin Zeng strives to reinvent the 25-year old enterprise. He wants to go beyond battery manufacturing and become a provider of green energy.

Last week, the company announced a partnership to build 10,000 battery exchange stations with Sinopec, a state-owned oil company. The company plans to build at least 500 battery swap stations this year.

Nio Power is one of Nio’s core assets and provides charging and battery exchange services to Nio owners and drivers of other EV brands, including Tesla and BYD.

The potential sale of the unit reflects Nio's increasing competition in China's automobile market.

Nio, in an effort to alleviate consumer concerns about EVs' short range, has built 3,240 battery swapping station, mainly in China. These stations allow customers to change a depleted pack of batteries with a fully-charged one in under three minutes.

However, the investments have reduced profitability.

Nio is also co-developing EVs which can be swapped with models from other automakers.

(source: Reuters)