Chinese new energy vehicle startup Nio has joined hands with a unit of China Southern Power Grid to build a battery swap station network.

China Southern Power Grid Peak Shaving and Frequency Modulation (Guangdong) Energy Storage Technology, a unit of China Southern Power Grid’s subsidiary China Southern Power Grid Energy Storage, signed a cooperation framework agreement with one of Nio’s units yesterday, China Southern Power Grid Energy Storage announced on the same day.

The pair will build more NEV battery swap stations and supporting infrastructures through equity investment cooperation and promote the commercial operation of battery swap stations as part of energy storage and data sharing networks to take advantage of their vast energy storage capabilities and data assets, China Southern Power Grid Energy Storage noted.

Moreover, the pair discussed the potential partnership on new business opportunities, such as battery banks, battery cascading use and recycling, and virtual power plants, the firm added.

China’s battery swap industry will usher in a rapid growth period as the number of NEVs is rising, Citic Securities said in a research report, predicting that the number of battery swap stations in the country will reach 27,489 by 2026.

Nio is China’s largest EV battery swap business operator. It owned and operated 2,316 battery swap stations as of the end of last year.