Third Nio plant approved in China

Chinese EV manufacturer Nio has received the go-ahead to establish its third domestic EV factory. The new plant could allow it to make one million EVs in China annually.

According to a new report from Reuters, Nio has received the nod from China to build a new vehicle factory. At present, the company is operating two domestic plants, both located in Hefei, Anhui Province. The third plant, called ‘F3’, is to be built in Huainan, a city a little over 100 km north of Hefei in the same province.

Nio has received the approval to manufacture 600,000 vehicles annually at its third plant. The company said that the capacity of its existing (F1 and F2) plants isn’t sufficient but doesn’t seem to be in a rush to utilise the entire permitted capacity of the upcoming (F3) plant. A Nio representative told Reuters that it has started construction of the third factory and that the facility would have an annual capacity of 100,000 vehicles on a single-shift basis. When asked if it was planning to expand the output to the maximum (600,000 vehicles) permitted capacity later, the Chinese Tesla rival declined to answer.

Nio’s decision to establish a third factory comes at a time when EV demand is facing a slowdown and Chinese companies are struggling with overcapacity. Nio founder and CEO William Li has defended homegrown EV makers, though, saying overcapacity is an issue with foreign brands, mainly because of their uncompetitive offerings. Nio apparently isn’t facing such a problem, as Li asserted.

If Nio fully utilises the full capacity of the F3 plant, it will be able to make 1 million vehicles in China. That’d bring it very close to Tesla, which can manufacture 1.1 million vehicles annually from its only Chinese factory, located in Shanghai. Nio will use the F3 plant to manufacture its lower-cost EVs from the new Onvo brand.

The new development comes just weeks after Nio launched an electric mid-size SUV ‘Onvo L60‘ as its first model under its second vehicle brand. Priced at 219,900 yuan (nearly 28,000 euros) in the base configuration, the Onvo L60 undercuts the base Tesla Model Y by 30,000 yuan (nearly 4,000 euros). One more brand for lower-cost EVs is in the making, under a project called ‘Firefly,’ and this brand will cater to European markets with sub-€30,000 EVs. Nio is yet to reveal the planned production location of those budget models.

reuters.com