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Chinese battery giant CATL (SHE: 300750) is in talks to buy a controlling stake in Nio Power, the power unit of Nio (NYSE: NIO), Reuters said in a report today, citing four people familiar with the matter.
CATL made the offer after announcing an investment of up to RMB 2.5 billion yuan ($342 million) in Nio Power in March, the people said.
The sources did not say how much CATL had bid in the proposed deal. However, Nio Power was valued at more than RMB 10 billion in a 2024 funding round, one of the sources said.
Nio announced on March 18 a new partnership with CATL to build the world's largest battery swap service network.
The two sides would also engage in capital cooperation, with CATL advancing an investment of up to RMB 2.5 billion in Nio Power, Nio said at the time.
Founded in May 2017 in Wuhan, Hubei province in central China, Nio Power was initially wholly owned by Nio and legally represented by Shen Fei, the electric vehicle (EV) maker's vice president, who began his role as president of Nio's sub-brand Onvo last week.
In May 2024, Nio announced that a Hubei government fund had made a RMB 1.5 billion strategic investment in Nio Power, the first external investment in the unit.
On June 6, 2024, Nio's management said in an earnings call that Nio held about 90 percent of the equity after Nio Power received its first external financing.
This meant that Nio Power was valued at around RMB 15 billion at the time.
In CATL's latest investment, Nio Power's valuation was reduced to about RMB 10 billion, according to a March 20 report by local media outlet 36kr.
This means that if CATL invests RMB 2.5 billion in Nio Power, it's expected to get a 25 percent stake, the report said.
CATL had also been interested in taking over other shareholders' shares in Nio Power to gain more say, the 36kr report said.
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