Photo Courtesy: Nio

Chinese electric vehicle maker Nio Inc. (NIO) has confirmed its long-awaited partnership with China Petroleum & Chemical Corporation (SNP) or Sinopec, on setting up battery swap stations at Sinopec’s gas filling stations, cnEVpost reported Monday.

What Happened: Nio has sent out a media invitation, saying it will sign a strategic cooperation agreement with oil giant Sinopec on April 15, as per the report. Nio also said its first second-generation battery swap station will go live at a Sinopec station in Beijing on the same day.

Sinopec is the largest supplier of refined oil products and petrochemicals as well as the second-largest oil and gas producer in China. The company has more than 30,000 gas stations, ranking it second in the world.

Speculation about a link between Nio and Sinopec emerged in February after it was reported that Sinopec Chairman Zhang Yuzhuo visited a Nio battery swap station during the Chinese New Year holidays.

Why It Matters: Nio is relying on service offerings to make an impact on customers in China. The company has pioneered the concept of battery-as-a-service that would allow users to rent a battery instead of purchasing one, helping to trim the cost for EV owners. Battery-swapping also provides the advantage of saving time as opposed to charging.

Nio unveiled its second-generation battery swap station at the NIO Day in January this year. The power swapping station can accommodate 13 batteries and has a daily capacity of up to 312 swaps.

The new swap station is designed so that users can start a self-service swap with one tap on the center display without getting out of the vehicle.

Nio aims to have 500 stations in operation nationwide by the end of this year.

Price Action: Nio shares closed almost 2.6% lower on Monday at $37.14, while Sinopec shares closed almost 0.9% higher at $52.25.