SHANGHAI, April 7 (Reuters) - Chinese battery giant CATL

is in talks to buy a controlling stake in electric

vehicle maker Nio's power unit, which runs more than

3,000 battery swapping stations in China, four people with

knowledge of the matter told Reuters.

CATL made the proposal after announcing a maximum 2.5

billion yuan ($342 million) investment in the unit, Nio Power,

in March, said the sources, who asked not to be named because

the talks are not yet public.

The sources did not say how much CATL was offering under the

proposed deal. However, one of them said Nio Power had been

valued at more than 10 billion yuan during a 2024 fundraising

round.

CATL declined to comment on the proposal when contacted by

Reuters.

Nio did not directly address questions about the possible

deal but said it was promoting joint construction of battery

swapping stations "with multiple investors, including CATL".

"Nio and CATL will deepen collaboration on capital and

business and further consolidate the strategic partnership to

jointly build the largest battery swapping network globally,"

Nio wrote in a response to a Reuters request for comment.

CATL is ramping up investments in battery swapping

facilities as chairman Robin Zeng aims to reinvent his

25-year-old enterprise, pushing beyond battery manufacturing to

become a green-energy provider.

The company, which aims to lead a trend it says will replace

a third of gas stations in China, announced a partnership with

state-owned oil company Sinopec last week to build

10,000 battery swap stations. At least 500 of them will be built

this year.

Nio Power, one of Nio's core assets, provides charging and

battery swapping services to Nio drivers and other EV brands

including Tesla and BYD.

The unit's potential sale reflects the intensifying

competition Nio faces in China's auto market.

In an effort to ease consumer concerns over EVs' limited

range, Nio has built some 3,240 battery swapping stations,

mostly in China, that allow customers to replace a depleted

battery pack with a fully charged one in less than three

minutes.

The investments, however, have been a drag on the company's

profitability.

Nio has also been co-developing EVs that can swap batteries

with other automakers' models.

($1 = 7.3086 Chinese yuan renminbi)