12 Mar 24

Chinese NIO to provide technical know-how to Middle Eastern EV startup

Chinese EV maker NIO agreed with the Abu Dhabi-based startup Forseven to license technology and ramp up electrification plans in the United Arab Emirates (UAE). 

Nio, renowned for its unique battery-swapping technology, will support Forseven, a unit of the Abu Dhabi government fund CYVN holdings, to manufacture EVs through technical know-how. Nio will license technology through its subsidiary Nio Technology, which aims to support Forseven in the research and development, manufacturing, and distribution of electric vehicles (EVs). 

Nio Technology will receive licensing fees through a non-refundable, fixed upfront payment along with royalties based on Forseven's future sales, according to South China Morning Post. 

The deal with Forseven is highly strategic, displaying Nio's ambition to expand its influence in the Middle East by partnering with domestic manufacturers backed by local governments. CYVN is also an investor in Nio. So far, it has funded the Chinese brand $2.2 million in exchange for 7% of its stake, equaling $738.5 million. 

Middle East to thrive with strategic partnerships 

The deal between Nio and Forseven is not the first of its kind. Saudi Arabia and the UAE significantly increased their interest in and investments in EVs and environmentally friendly solutions following the COP 28 Conference last year. 

Lucid Motors, originally a powertrain manufacturer turned into a premium EV brand, opened its first international manufacturing facility in Saudi Arabia last year, following a $1 billion funding from Saudi Arabia's Public Investment Fund (PIF). Lucid, the manufacturer of Lucid Air, the longest-range EV available, hopes to overcome financial struggles with strong backing while satisfying the premium EV demand in the region. 

Saudi Arabia's ambitions are not limited to EVs but also future smart cities. NEOM, a smart and sustainable regional development project in the northwestern region of Saudia Arabia, has invested $100 million into Chinese autonomous driving (AV) tech company Pony.ai through its strategic investment arm, NEOM Investment Fund (NIF). The goal is to enable autonomous vehicles on a 100% renewable energy grid and expand the use of AVs in the Middle East and North Africa through a joint venture. 

Strategic partnerships between Chinese brands and foreign companies occur both overseas and in China. German giant Volkswagen and Chinese EV manufacturer Xpeng entered a strategic partnership in July 2023, agreeing to jointly develop two B-class battery electric vehicles (BEVs) bearing the Volkswagen badge. The jointly developed EVs are expected to be released in the Chinese market in 2026. 

The partnership includes Volkswagen owning 4.99% of Class A ordinary shares of Xpeng in exchange for a $700 million investment. However, the deal is not limited to producing EVs; it expands into long-term partnerships to develop EV platforms and next-generation connected technologies and build future EV platforms. 

Nio to steal customers with ET9 

NIO had a successful 2023, delivering 160,038 vehicles, representing an increase of 30.7% year-on-year. The company delivered 449,594 vehicles as of the end of 2023 since its foundation in 2014. 

Nio's Q4 2023 deliveries totalled 50,045 EVs, a 25% increase year-on-year. The majority of the sales comprised premium smart electric SUVs and premium smart electric sedans. Now, the Chinese brand is making plans for the ET9. 

The ET9, unveiled in December 2023, will be Nio's biggest card in the luxury EV segment, with an expected release date of early 2025. It has a total energy output of 697 hp, produced by a small asynchronous motor at the front and a 456-hp permanent-magnet synchronous motor at the rear. Equipped with a 120 kW/h battery at 925 volts, ET9 has a range of up to 622 km and a DC fast-charging capacity of up to 600 kW.

The main image is courtesy of NIO.

Authored by: Mufit Yilmaz Gokmen