NIO is reportedly planning to build its first battery plant to produce large cylindrical batteries similar to those used by Tesla, according to sources cited by Reuters. The new plant, located next to NIO’s major manufacturing center in Hefei, eastern China, will have an annual battery capacity of 40 GWh and will be capable of powering approximately 400,000 long-range electric vehicles.
The move is aimed at reducing NIO’s reliance on suppliers such as CATL, and the company’s founder, chairman, and CEO, William Li, confirmed in an earnings call last June that NIO would develop its own batteries.
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NIO has a battery team of over 400 people to research areas including battery materials, cells, and battery management systems. The company’s new battery pack will be available in 2024 and will support 800V high-voltage fast charging.
NIO is currently producing vehicles at two plants in Hefei. Reuters’ report does not specify which vehicle assembly plant the battery plant will be located near, but previous information suggests it may be located in NeoPark.
NIO’s move to develop its own batteries has faced some skepticism, but Li has said that it is a normal strategy for automakers to make batteries. CATL, which has more than 50% share of China’s power battery market, has been under pressure to retain customers and is introducing measures to improve loyalty.
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The company has been pushing a program to several strategic customers, including NIO, Li Auto, Huawei, and Zeekr, to lower their battery purchasing costs. The core terms of the partnership include that CATL will settle a portion of the price of power battery supply with automakers at a price of RMB 200,000 per ton of lithium carbonate for the next three years, while automakers that sign the partnership will need to commit about 80% of their battery purchases to CATL.
