NIO Reportedly Seeking BYD Batteries for Sub-Brand: Report
Chinese electric vehicle (EV) maker NIO is on the verge of signing a deal with battery giant BYD to supply batteries for the former’s upcoming sub-brand, according to a Thursday report from local media publication 36kr (via CNEVPost).
Just a couple months ago, NIO surpassed BYD as the most valuable car brand in China, and the two may soon be in business together.
BYD is an EV manufacturer in its own right but also happens to be one of the largest battery makers in China, second only to CATL.
While CATL commands a higher share of the EV battery market and supplies many of the frontrunners in the electrification race, it is starting to run out of production capacity and is heading towards supply constraints. NIO is actually CATL’s second-largest customer after Tesla.
Even though BYD’s batteries are more expensive than CATL’s offerings, the company has more supply than its competitor. According to estimates, NIO needs over 10GWh worth of EV batteries to meet its sales goals, and the automaker is hitting CATL’s supply ceilings as it is.
BYD’s Lithium Iron Phosphate (LFP) “blade batteries” have become quite the hot commodity, with many leading automakers expressing an interest in using them to power their EVs.
Tesla has been rumoured to start using BYD’s blade batteries in 2022, with an October report claiming that the two companies were nearing a deal. Reports from the same month also indicated that Tesla has secured 800,000 vehicles’ worth of batteries from CATL, so the company’s battery supply chain for the near future might be a bit of a mixed pot.
When NIO reported its second-quarter earnings for the year on August 12, it confirmed it would launch a sub-brand to enter the mass market.
News of the possible NIO-BYD deal did not include any more information of the former’s upcoming sub-brand. What we know so far is that it will be placed to enter the mass-market, the core leadership has already been established, and preparations for the launch are underway.
“The NIO brand has a similar relationship with this new brand as Lexus has with Toyota and Audi has with Volkswagen,” said NIO founder, chairman, and CEO William Li.
According to Li, NIO is planning on a mass-market launch for the sub-brand with prices that will be lower than Tesla but a user experience that will far surpass what the American automaker has to offer.