China's Nio joins the race for lithium, buys 12% of Australia's Greenwing Resources
Summary
Chinas electric vehicle upstart Nio has joined Tesla in sourcing raw materials directly from mines rather than its own battery suppliers as soaring prices of lithium, a critical component of EV batteries, hurt manufacturers supply chain stability and bottom lines.Lithium carbonate prices in China hit a record 501,500 yuan/tonne in September, tripling the number from a year ago. Chinas Contemporary Amperex Technology, the worlds largest EV battery provider by usage and a supplier to Tesla and Nio, has been particularly aggressive. CEO William Li said on its June earnings call that the firm was stepping up battery-related investments to gain more bargaining power over upstream costs. To mitigate the impact of the rising material costs, we have taken a series of countermeasures such as adjusting product prices.BYD, the Warren Buffettbacked Chinese manufacturer that is closing in on Tesla by producing a mix of hybrid and electric vehicles, has also been getting its hand on the global lithium supply. In January, the firm said that it won a contract from Chiles mining ministry to produce 80,000 metric tons of lithium over 20 years with an offer of $61 million, but the auction was subsequently suspended by a local court under political pressure.