NIO's battery plant will have an annual capacity of 40 GWh and could power about 400,000 long-range electric vehicles, Reuters reported.

NIO (NYSE: NIO) plans to build its first battery plant to produce large cylindrical batteries similar to those used by Tesla, Reuters said today, citing two people familiar with the matter.

The new plant would have an annual battery capacity of 40 GWh and could power about 400,000 long-range electric vehicles (EVs), the report said.

The plant will be located next to NIO's major manufacturing center in Hefei, in eastern China's Anhui province, the people said.

NIO's move is aimed at reducing its reliance on suppliers such as CATL, according to the repor.

On June 9, 2022, William Li, founder, chairman and CEO of NIO, confirmed in an earnings call that the company would develop its own batteries.

NIO has a battery team of more than 400 people to research areas including battery materials, cells, and battery management systems to fully establish battery system development and industrialization capabilities, he said at the time.

The company's new battery pack will go into production in 2024 and will support 800V high-voltage fast charging, according to Li.

Before Li confirmed the plan, an environmental assessment report in late May last year showed that NIO planned to invest RMB 218.5 million in Shanghai, where its global headquarters are located, to build a lithium battery lab and cell trial line.

On August 24, local media LatePost reported that NIO was developing lithium manganese iron phosphate (LMFP) and 4680 cells in-house.

NIO will put LMFP batteries into small-scale production for the sub-brand codenamed ALPS, which is targeting the RMB 200,000-300,000 market and is expected to be available in 2024, the LatePost report said.

NIO vehicles are currently produced at two plants in Hefei -- the JAC NIO advanced manufacturing base, or the F1 plant, and the F2 plant in NeoPark.

The Reuters report today does not specify which NIO battery plant will be located near the plant, although previous information suggests that the battery plant may be located in NeoPark.

On April 29, 2021, NeoPark, an electric vehicle industrial park jointly promoted by NIO and the Hefei municipal government, began construction with a planned annual capacity of 1 million vehicles and a planned annual battery capacity of up to 100 GWh.

NIO developing multiple batteries, including 4680-type, report says