Nio, CATL’s third customer after Tesla, cuts reliance on battery giant in diversification deal – XPeng (NYSE:XPEV)

XPeng Inc. XPEV has diversified its battery suppliers and does not count industry giant CATL as its main supplier, said Brian Gu, chairman of the Chinese electric carmaker, according to Reuters.

According to the Chinese consulting firm Gaogong Institute of IndustryXPeng was CATL’s third customer after You’re here Inc. TSLA and NOTOI Inc. NIO in terms of battery volumes installed in 2021, the report says.

What happened: According to Gu, the company now uses several battery manufacturers in addition to CATL. “We have already diversified our offer of battery suppliers. CATL is no longer our largest material supplier. We have actually worked with several high-quality battery suppliers, for example, EVE, CALB,” Gu said according to the report.

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XPeng works with a small Chinese battery manufacturer Sunwoda Electronic Co Ltd. to develop a fast-charging battery for the G9, the report says. This would allow the SUV to reach 80% charge in 15 minutes, he said.

The report cited the China Automotive Battery Innovation Alliance which indicates CATL is still far ahead of its competitors, with a market share of 47.45% in China. At a time, CALB ranked third and Sunwoda ranked fifth, accounting for 7 percent and 2.5 percent of the total battery supply respectively in the first eight months, he said.

why is it important: The move comes on the heels of Chinese electric vehicle makers trying to control costs after CATL’s price hike this year. As spikes in the prices of key metals such as lithium began to weigh on CATL’s profit margins, the company raised battery prices in March, according to a Reuters report.

XPeng did not immediately respond to an email seeking comment. CATL did not immediately respond to a query posted on its website.

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