By Michael Elkins
According to a report by CnEVPost over the weekend, Chinese electric vehicle maker, Nio (NYSE:NIO) has entered into a strategic partnership with one-piece die-casting parts supplier Wencan Group (SS:603348).
According to the report, the two companies will collaborate on supply, low carbon, digitalization, and globalization to achieve supply support around NIO's Hefei plants. Wencan and NIO will collaborate in depth on lightweight research and development of integrated die-casting structural parts for the body and new material applications.
Wencan will also use its global presence to provide full support to NIO's international business and to provide full support to the electric vehicle company's global R&D and product validation, while NIO promotes Wencan's casting business to its partners and explores cooperation in other business areas.
Wencan is one of China's best-known suppliers of integrated die-casting parts and a core supplier of structural body parts to NIO, according to the team led by Cui Yan, an analyst at local brokerage firm Huaxi Securities. Wencan's parts are used in NIO's entire lineup of models, and the average value of its parts used per NIO vehicle is more than RMB 3,000 (RMB 1 = $0.1452), Cui's team said in a March 17 research note.
Shares of NIO are down 1.33% in mid-day trading on Monday.