Nio’s cylindrical battery plan points to a very small year-end batch

By Daniel Okafor

More than 2 billion yuan ($298 million at $1=6.7180 yuan) has gone into Nio Inc.’s (NYSE: NIO) battery research and development, while Jipian Lab reports that only a very small batch of in-house large cylindrical cells is expected to reach production lines by year-end.

Founder, Chairman and CEO William Li said in a September media interview that the company had "invested more than 2 billion yuan ($298 million) in battery research and development."

What can actually come out of the pilot?

Battery industry outlet Jipian Lab reported Monday that Eve Energy (SZSE: 300014) and Gotion High-tech (SZSE: 002074) are slated to handle contract manufacturing.

The report gave no unit volume or annual capacity for the initial run and did not identify manufacturing sites. It described mass production as difficult in the near term. The year-end batch therefore marks progress after repeated delays, not supply at scale.

Nio’s model is deliberate: retain core cell research in-house, then use contract manufacturers that also support vehicle deliveries. Li said Nio continues to invest heavily in long-life large cylindrical cells under that internal-R&D and contract-manufacturing structure. The arrangement spreads capital and execution risk. It also makes production claims harder to read.

Until actual output and yield are disclosed, the small batch remains a report to verify rather than a production milestone.

Takeaway: Nio funds the research, but suppliers still must deliver the cells.

Why did the flagship ET9 launch without them?

In 2023, Nio pursued a battery factory with planned annual capacity of 40 GWh, then slowed equipment purchases and delayed mass production. On a December 2023 earnings call, Li said the company would keep researching cells, materials and battery packs but outsource production to reduce costs.

That same month at Nio Day, Nio unveiled its 46105 large cylindrical cells for a 120-kWh pack intended for the flagship ET9 executive sedan. Nio announced energy density of 292 Wh/kg and support for 5C fast charging.

When the ET9 officially launched in December 2024, it carried a 100-kWh pack with CATL prismatic cells instead. The flagship therefore launched without the internally developed cylindrical pack, a sequencing choice that says more about readiness than branding.

Jipian Lab said Nio has since changed the cylindrical-cell specifications and no longer limits them to the 46105 format, so the earlier figures do not necessarily define the latest design.

At an August 7 user event, Li said the 120-kWh pack "remained under development" and would be compatible with all Nio main-brand models, but he gave no launch date.

Takeaway: The ET9 proves Nio can launch with CATL; the 120-kWh pack still has no date.

How far does CATL now reach?

Nio is buying more prismatic batteries from CATL (HKEX: 3750), and both Onvo and Firefly now use them. In January, the companies announced a five-year agreement to deepen their partnership, including joint development of long-life batteries and technology for battery swapping.

Firefly introduced a 60-kWh pack on October 23. CATL confirmed the next day that it uses Qilin Battery technology and delivers 560 km (348 miles) under the CLTC test cycle. Firefly’s existing 42-kWh battery comes from Sunwoda (SZSE: 300207), so the new pack adds a second cell supplier rather than replacing one.

Taken together, CATL now supports the ET9, Onvo and Firefly while Nio develops a cylindrical alternative. The arrangement keeps vehicle supply moving, but it also shows how far the in-house program must travel before its cells appear at meaningful volume in Nio vehicles.

Takeaway: CATL supplies the present; Nio’s cylindrical cells remain a future option.

What has to happen next?

Watch the year-end run first: actual units off the Eve and Gotion lines, yield and any disclosed ramp schedule will determine whether a "very small batch" becomes meaningful production.

Then watch for a launch date for the 120-kWh pack and the first main-brand model assigned to it. Also watch whether Nio changes its make-or-buy policy: the current plan keeps core R&D in-house and battery manufacturing outsourced. Any move toward the old 40 GWh target would require a new capacity commitment; no restart has been announced.

Takeaway: Nio has shown research spending and pilot intent, but not production scale.