This battery-swapping model is appealing because customers only need to pay for the vehicle when purchasing a vehicle through the battery bank. After that, they pay a monthly rental fee for the battery. Not only does this reduce the procurement cost of EVs but the rental and service fees for battery swapping during daily operations are 30% to 50% cheaper than fast charging. Since batteries are swapped out, it extends the lifespan of the batteries and protects the environment since the dismantling and recycling of the batteries after retirement complies with environmental policies.

U Power isn't your run-of-the-mill EV battery-swapping player, either. The company started out in 2013 as a vehicle-sourcing services company focused on lower-tier cities in China. Since then, U Power has forged partnerships with leading automotive manufacturers. Utilizing a distinctive financial model coupled with customized vehicle offerings, the company has filled the market gap beyond the 4S dealership network, establishing over 800 operational outlets across China. 

In 2017, U Power emerged as one of the earliest entrants into the new energy electric vehicle sales market. Leveraging market insights and accumulated experience, U Power pioneered the UOTTA battery-swapping technology in 2019. Collaborating with automotive manufacturers, the company introduced various models of battery-swapping vehicles for commercial use, successfully penetrating the market. Moreover, U Power is also a key contributor to the drafting of China’s battery-swapping standards. With its industry influence and advantages, U Power achieved a milestone in 2023 by becoming the world’s first publicly listed company specializing in electric vehicle battery-swapping technology.

The company's efforts towards forging partnerships were also on display recently with U Power inking a deal with Dutch electric vehicle company UNEX to provide battery-swapping vehicles and swapping station services to Associação Nacional dos Transportes Rodoviários em Automóveis Ligeiros (ANTRAL), the association representing public passenger road transport companies operating light vehicles designated as taxis in Portugal. ANTRAL will use U Power's UOTTA technology and battery swapping station model. Through the collaboration, the two aim to significantly reduce greenhouse gas emissions in the transport sector by 2030, in line with the European Union’s decarbonization targets and Portugal’s regulatory requirements for taxi vehicles. Combining U Power's battery-swapping station model and UNEX's extensive network and market know-how, U Power said the goal is to sell the taxi industry EVs and install charging and battery-swapping stations. The first phase of the agreement is expected to provide two swapping stations and 120 battery-swapping taxis.  

“This collaboration between UNEX and ANTRAL that utilizes our UOTTA technology marks a significant stride towards promoting sustainable transportation and reducing emissions. By combining our battery-swapping expertise with their commitment to decarbonization, we aim to facilitate the transition of taxi fleets from fossil fuels to electric mobility," said Jia Li, Chairman and CEO of U Power. "This partnership highlights the global taxi industry’s shift towards electrification, which will lead to reduced operational costs, increased driver earnings, and lower carbon footprints." About 50,000 to 60,000 European taxis are expected to transition to electric vehicles in the next three to five years, presenting a big opportunity, reports U Power.  

Collaborations like that are behind the company's revenue growth of 153.5% from fiscal year 2022 to fiscal year 2023. As U Power collaborates with more and more customers, it is building a brand and reputation in the market, which the company expects will drive further growth in the future. It is a big opportunity. The market size for battery swapping and electric commercial vehicles is projected to reach RMB 176,615.1 million in 2026, growing at a CAGR of 68.1% from now until then, according to a report by Frost & Sullivan, cited by U Power. 

Beyond its deal with ANTRAL, U Power is making inroads in other areas of its international expansion, including in Hong Kong, Southeast Asia and Peru. The company is focused on electrifying the commercial vehicle sector, particularly targeting urban taxis, buses, logistics vehicles, and transportation vehicles in mines. A crucial aspect of U Power’s strategy is to collaborate with local industry-specific clients, integrating successful experiences from China with the specific demands of these clients. This approach involves systematizing the output of battery swapping stations, swapping vehicles, and battery banks, facilitating the rapid development of battery swapping services.

In Peru, U Power just embarked on a collaborative pilot test with a Peruvian mining firm to evaluate electric heavy-duty vehicles on an established haulage route. This venture aims to identify an efficient substitute for traditional fuel-powered trucks, offering the potential to cut energy use and reduce operational costs, reports U Power. 

Then there's its deal with Cornerstone Technologies Holdings Limited, a leading EV charging solution provider and charge point operator based in Hong Kong with an increasing presence across Southeast Asia. Under their memorandum of understanding, the two are jointly exploring and developing a strategic business relationship. "Through this collaboration, we believe our battery swapping stations will gain increased visibility in our target markets. We look forward to building a successful relationship that delivers sustainable value for our shareholders," said Li. 

Even business with U Power's existing customers is growing, underscoring the quality and innovative nature of its technology. Earlier this month, U Power announced it received a follow-on purchase order for its advanced dual-mode intelligent battery swapping stations from a major taxi operator in Jilin, China. These dual-mode intelligent battery swapping stations feature separate robotic guided vehicles (RGVs) for battery removal and installation. The use of robotics reduces the battery swapping time from between three to five minutes to two to three minutes. What's more, U Power said the maintenance cycle of the swapping stations has been optimized, reducing weekly maintenance time by around six hours and enhancing operational efficiency by approximately 15%.