Chinese electric vehicle (EV) manufacturer Nio Inc is building a test facility in the USA to leasing battery packs for EVs, as the company prepares to roll out its battery-as-a-service business model to key overseas markets, according to reports in China last week.

The facility, near the company’s US headquarters in San Jose, California, is expected to be operational by November, ahead of a broader nationwide roll out in the next few years. The Shanghai-based automaker has not yet confirmed this report, but said it was “moving forward with relevant work as planned”.

Last month Nio announced plans to roll out a network of some 4,000 battery-swapping stations globally in the next few years, starting with key markets such as the USA and Europe. The company already has 1,000 battery-swapping stations operational across China – including some 260 along major highways.

The automaker aims to reduce the initial cost of EVs by separating the battery business from the new car business, by establishing a standalone battery swapping and leasing business which it plans to make available to all compatible brands. The company expects this business model will help reduce the cost of EV ownership by 20%, as well as cut recharging times and costs.

Earlier this month Nio announced plans to open its first overseas factory in Hungary in September 2022, to produce power products including battery-swapping stations for the European market to support its sales operations in the region.

The company also plans to build an EV assembly plant in the USA by 2025, according to unconfirmed reports citing industry insiders.