Nio Close To Striking A Deal With Warren Buffett-Backed BYD For Mass Market Brand EV

Nio Inc - ADR's NIO Nio Day 2021 turned out to be a disappointment for some who were expecting the company to unveil more than one vehicle model, the ET5. It now appears the company is on track to announce another model.

What Happened: Nio is in advanced talks with Warren Buffett-backed BYD Company ADR (OTC: BYDDY) over the launch of a Nio sub-brand model the company has been hinting at, CnEVPost reported, citing local Chinese media 36kr.

The companies have reportedly entered the final stage of discussions about cooperating for Nio's mass market brand.

The report was light on details and did not delve into the sub-brand per se, or how the partnership arrangement will look.

The discussions between the companies come at a time when Nio is looking to diversify its battery supply chain, the report said. BYD's blade battery announced in March 2020 has been in demand by automakers including Tesla Inc TSLA.

Related Link: Nio Analyst Reiterates Bullish Stance And Hikes Revenue Estimates Following 'Nio Day 2021'

Why It's Important: Nio announced in its third-quarter earnings statement it will launch three new models based on its Nio Technology 2.0 platform in 2022.

Before the announcement, founder, Chairman and CEO William Li said during the second-quarter earnings call that Nio will enter the mass market with a new brand and a core team has been assembled for the purpose.

"If we just take the positioning of the NIO brand and the NIO mass-market brand, a simple comparison is going to be more like the relationship between Audi and Volkswagen AG VWAGY and Lexus with Toyota Motor Corp TM," Lee had said.

NIO Price Action: Nio shares were up 0.034% at $29.86 Thursday morning at publication.

Photo: ET5, unveiled on Nio Day 2021, courtesy Nio