EV maker Nio plans to outfit its vehicles with lithium iron phosphate (LFP) battery packs in the final quarter of this year, which would allow the company to lower its vehicle prices and gain market share, 36Kr reported on Wednesday.
The new batteries, which will be provided by CATL and are currently undergoing testing, have a lower power density compared with ternary lithium batteries that use nickel cobalt manganese oxides.
Nio’s EVs can now be purchased starting at RMB 358,000 (USD 55,300). In 2020, the company delivered 43,728 vehicles, a 112.6% increase year-over-year.
Tesla has reduced prices for its Model 3 from more than RMB 300,000 (USD 46,400) to around RMB 249,900 (USD 38,600) by switching to lithium iron phosphate batteries in China, pushing sales in the country well beyond the 100,000 mark.
Xpeng already equipped its G3 and P7 models with the same batteries, a move it expects to “resonate across a broader customer base,” said founder He Xiaopeng during the fourth quarter earnings call in March. Brian Gu, vice chairman of Xpeng, told analysts that since the launch of its new products, up to 20% of new P7 orders and 10% of the new G3 bookings requested the LFP option.