Nio presses ahead with in-house cylindrical cells, with limited output reported by year-end

• Eve Energy and Gotion will reportedly handle contract manufacturing, but mass production remains challenging in the near term.
• Nio is retaining in-house cell development while expanding the use of CATL batteries across its brands.

Nio Inc (NYSE: NIO) is pressing ahead with its in-house large cylindrical batteries, with a very small batch of cells expected to roll off production lines by year-end, marking progress for a project that has faced repeated delays.

The cells will be manufactured by Eve Energy (SZSE: 300014) and Gotion High-tech (SZSE: 002074), though mass production remains difficult in the near term, battery industry media outlet Jipian Lab reported on Monday.

Nio is also increasing its purchases of prismatic batteries from CATL (HKEX: 3750), with its Onvo and Firefly brands both now using the supplier's batteries, the report noted.

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The arrangement continues Nio's strategy of retaining core battery research and development while outsourcing manufacturing, advancing its own technology while relying on external suppliers to support vehicle deliveries.

Nio founder, chairman and CEO William Li said in a media interview in September that the company had invested more than 2 billion yuan ($298 million) in battery research and development, Jipian Lab noted.

Li said at the time that Nio continued to invest heavily, focusing its in-house development on long-life large cylindrical cells under a model combining internal R&D with contract manufacturing.

Li Auto launches Lianshan in-house EV tech system, backs self-developed batteries with lifetime safety pledges - CnEVPostThe launch comes as Li Auto shifts its batteries from CATL to in-house developed ones produced by its joint venture with Sunwoda.

Nio's battery strategy has shifted over the past few years. In 2023, the company pursued a battery factory with a planned annual capacity of 40 GWh, but subsequently slowed equipment purchases and delayed mass production.

During an earnings call in December 2023, Li said the company would continue researching cells, materials and battery packs, but would outsource production to reduce costs.

That same month, Nio unveiled its in-house 46105 large cylindrical cells at Nio Day, with plans to use them in a 120-kWh battery pack for its flagship ET9 executive sedan.

The specifications announced at the time included a cell energy density of 292 Wh/kg and support for 5C fast charging. However, when the ET9 officially launched in December 2024, it instead used a 100-kWh battery pack with CATL prismatic cells.

Nio's large cylindrical cell specifications have since changed and are no longer limited to the 46105 format, Jipian Lab said, meaning the earlier specifications do not necessarily reflect the latest design.

At a user event on August 7, Li said the 120-kWh battery pack remained under development and would be compatible with all Nio main-brand models, but gave no specific launch date.

Meanwhile, Nio's cooperation with CATL continues to expand. In January, the companies announced a 5-year agreement to deepen their strategic partnership, focusing on joint development of long-life batteries and technology to support battery swapping.

The latest result of that partnership comes from Firefly. The brand introduced a 60-kWh battery pack on October 23, and CATL confirmed the following day that it uses its Qilin Battery technology, delivering a CLTC range of 560 kilometers (348 miles).

Firefly's existing 42-kWh battery is supplied by Sunwoda (SZSE: 300207). The addition of CATL batteries further broadens cooperation between Nio's brands and the major supplier.

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