Asia Tech Wire (June 6) -- Chinese electric car maker Nio Inc. has denied that its third factory under construction has an annual capacity of 600,000 units.
This follows a Reuters report that Nio has received approval to build a third factory, which would expand its current capacity to 1 million units per year and would also be close to the current capacity of about 1.1 million units at rival Tesla's Shanghai plant.
The report also noted that the electric carmaker's third factory (F3), located in Huainan, Anhui province, will focus on production for Nio's new ONVO brand, with an annunal capacity of 600,000 units.
Responding to the report, Nio co-founder and president Lihong Qin said late Wednesday that Nio's third factory, located in the Hefei Xinqiao Smart Electric Vehicle Industrial Park, has recently begun construction with a single-shift capacity of 100,000 units.
The executive's response confirmed the construction of the F3 plant, but indirectly denied that it could produce up to 600,000 vehicles per year.
According to Qin, the new plant will produce Nio brand and ONVO brand cars after its completion.
"Due to the recent hot sales of the Nio brand and the company's long-term strategy, Nio's two existing plants in Hefei have reached their designed single-shift capacity," Qin explained.
With the subsequent launch of new products, the production capacity of the existing plants can no longer meet the market demand, he said.
"Nio does not have an overcapacity problem," Qin emphasized.
Nio currently has two vehicle plants, the Nio Hefei Advanced Manufacturing Base (F1) and the Nio Second Advanced Manufacturing Base (F2), both with an annual design capacity of 300,000 units.
The F1 plant is responsible for the production of Nio ES8, ES6, EC6, ET7 and other models, while the F2 plant currently produces ET5, ET5T and L60, the first model of the ONVO brand.
Nio will start delivering the ONVO L60 in September this year, according to the company's plan.
An industry insider familiar with Nio analyzed that "from the current NIO brand sales and situation where ONVO has only one model, Nio really do not have the need to build a new factory."
"But with the abundance of ONVO brand models and the launch of the third brand Firefly, Nio must plan its production capacity well in advance," the person pointed out.
Nio founder and chairman William Li eagerly promoted Firefly to the European market during a livestream last month, saying it's a small car brand that's very suitable for the market.
And sources close to the matter said that the second model under the ONVO brand will be a 7-seater.
Obviously, the upcoming debut of the Firefly brand and the ever-expanding ONVO product lineup, lets Nio make forward planning for future production capacity.
