Chinese electric car maker NIO (NYSE:NIO) has announced it has expanded its car-making deal for another three years — and that its partner will be doubling output.
Although company executives have discussed building their own factory, NIO does not currently have one. Its products are instead made inside a factory owned by the state-owned vehicle maker Jianghuai Automobile Group (JAC) in Hefei, the city where NIO is located.
Under the new contract, the JAC location will keep building NIO cars for another three years, through May 2024. JAC also agreed to boost their capacity to 240,000 electric vehicles a year (or 20,000 a month). That will be around double the amount of NIO cars.
NIO announced in April that it had finished upgrades that will allow it to make 10,000 vehicles per month, though continuing shortages of semiconductors and battery cells have limited it to less output.
As with many contracts involving Chinese firms, the details are complicated. While JAC owns the factory, the factory was built just for NIO, and it’s ran by another company named Jianglai Advanced Manufacturing. This company is a partnership between JAC and NIO in which NIO maintains a 49% ownership.
NIO and JAC did not reveal when the increase in capacity will start.
Author: Blake Ambrose