A Nio ES 8 SUV is displayed at a car show held in Chongqing. ZHANG DANDAN CHINA DAILY Chinese electric vehicle maker Nio may invest around 600 million yuan $83.74 million in Australia-based miner Greenwing Resources Ltd, which is said to be stepping up its development of the San Jorge project in Argentina.
Nio's investment will help it expand its global footprint and secure raw material supply for EV batteries, observers said.
Nio's move came after the price of lithium, a key material used in EV production, surged over 700 percent since the beginning of 2021, which has resulted in a surge in battery pack prices, according to S&P Global Commodity Insights.
The price of battery-grade lithium carbonate reached 515,000 yuan per metric ton on Tuesday, approaching a new record high of 517,000 yuan per ton in March, according to data from Mysteel Group.
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Ma Lin, Nio's director of public relations, said the company would evaluate the demand- and- supply scenario in the market and carry out businesses in upstream industries related to the manufacture of EV core parts to ensure Nio's long-term competitiveness.
Nio's delivery volume increased by 10,677 units last month, an increase of 82 percent year-on-year. In the first eight months of this year, the EV brand delivered 71,556 new vehicles, an increase of 28 percent year-on-year. Nio has delivered 238,626 EVs to date.
In the last year, GAC Capital, a subsidiary of Guangzhou Automobile Group Co Ltd, collaborated with Shang Qi Capital, a subsidiary of SAIC Motor, to invest in Jiuling Lithium in Jiangxi province. In 2017 Great Wall Motors invested in Australian lithium mining company Pilbara Minerals.
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According to Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, the demand for lithium continues to grow, but demand still surpasses supply due to the rising EV industry.
Although the element of lithium is not scarce in nature, the process of extraction and refining takes time, leading to a situation where supply lags demand. The situation has some appeal to investors. With investment inflows, supply will pick up and prices may fall. The change is cyclical, Lin said.
EV battery manufacturers are on a lithium-related investment spree. Contemporary Amperex Technology Co Ltd announced last year that it will invest a total of 13.5 billion yuan in a lithium battery manufacturing base in Yichun, Jiangxi province, one of China's lithium hubs.
In November of this year, Eve Energy Co Ltd, another battery giant, announced that it plans to invest 6.2 billion yuan in battery manufacturing projects in Jingmen, Hubei province. In July 2021, in an earlier round of investment, 2.45 billion yuan was pumped into multiple lithium battery projects in the same city.