NIO Inc. (NIO) shares perked up in Monday's premarket session after the EV maker announced a battery-swapping and charging transaction with Zhejiang Geely Holding Group Co., Ltd.

Geely Holding's automotive portfolio includes Geely Automobile Holdings Ltd. (GELFY). The transaction brings external capital into NIO Power while allowing NIO China to retain majority control.

Geely Takes 30% Stake in NIO Power

A Geely subsidiary will take a 30% stake in NIO Power, valuing the business at about 16 billion yuan (~$2.38 billion) post-money.

Geely will contribute its stake in Yiyi Internet Technology (Chongqing) Co., Ltd. plus 640 million yuan in cash. After closing, NIO China will retain a controlling 63.6% stake.

Geely's stake could fall to no less than 20% if certain operational milestones are missed. It can also invest another 640 million yuan, potentially increasing its stake to 34% and reducing NIO China's ownership to 60%.

NIO, Geely Expand Energy Cooperation

NIO China will also acquire a 10% stake in Zhejiang Haohan Energy Technology Co., Ltd., Geely's battery-charging subsidiary. Haohan Energy will use the investment to purchase certain charging assets from NIO.

The companies also plan to explore wider use of battery-swapping technology across Geely-affiliated consumer and commercial vehicles.

NIO Technical Outlook: Downtrend, Oversold Signals, Key Support

NIO remains near the bottom of its 52-week range of $3.55 to $8.02 and trades below its 20-day SMA of $3.77, 50-day SMA of $4.29, 100-day SMA of $4.83, and 200-day SMA of $5.09.

The broader trend remains weak, with the 20-day SMA below the 50-day SMA and a death cross formed in June.

Momentum is also stretched. NIO's RSI stands at 28.97, indicating oversold conditions that can support short-term rebounds even within a broader downtrend.

Key support sits near $3.50, just below the stock's 52-week low. A sustained move above the 20-day SMA at $3.77 would mark the first sign of improving near-term momentum.

NIO Holds Mixed Analyst Outlook

The stock carries a Hold consensus rating with an average price target of $5.50.

JPMorgan downgraded NIO to Neutral and lowered its target to $4.50 on Sept. 2. Bernstein maintained Market Perform and cut its target to $5 the same day, while Goldman Sachs upgraded NIO to Buy with a $7 target on July 13.

NIO Price Action: Nio shares were up 1.40% at $3.63 during premarket trading on Monday. The stock is trading near its 52-week low of $3.55, according to market data.