(Yicai Global) March 25 -- Chinese electric vehicle maker Nio and handset giant Xiaomi are reportedly in touch with BYD's affiliate FinDreams Battery to buy the latter's car batteries.

Nio will use BYD's lithium iron phosphate battery based on the partnership that the carmaker and FinDreams Battery penned before the Chinese New Year holiday that started in late January, tech news outlet 36Kr reported today. 

FinDreams is China's second-largest battery supplier which is seeking new clients to reduce its reliance on BYD.

Since last July, several staff members responsible for battery matters at Nio have visited BYD's head office in Shenzhen. A photo of the Shanghai-headquartered carmaker's Chairman Li Bin and BYD chief Wang Chuanfu visiting Nio's Hefei plant was circulating online on March 16. 

At present, Nio's batteries are exclusively provided by the world's biggest battery maker Contemporary Amperex Technology. But its demand is rising as Li said during a conference call today that the firm intends to introduce a new auto brand to enter the broader consumer market with models priced between USD30,000 and USD50,000. Research and development for the brand has begun, he added. However, Li said that this year's battery supply should be met through Nio's collaboration with CATL.

Xiaomi's first new energy vehicles may come with BYD or CATL batteries. The more affordable version should feature a 400-voltage platform and include BYD's blade battery, according to the report. The high-end 800V version should use CATL's products but cooperation details are not yet finalized, an insider close to the Beijing-based phonemaker told 36Kr.

BYD has offered discounts and made concessions regarding contract terms to seal collaboration with Nio and Xiaomi, the source told the same news source. 

Editor: Emmi Laine, Xiao Yi