The first phase of the park is scheduled to be completed in the first half of 2023 and will have an annual capacity of 300,000 tons of aluminum die-casting.

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NIO (NYSE: NIO, HKG: 9866, SGX: NIO) plans to build an industrial park in Lu'an city, Anhui province, in East China to bring more parts supplies closer to its vehicle production base.

The company today signed a framework cooperation agreement with the Lu'an municipal government, agreeing to jointly build the smart electric vehicle parts industrial park in the Lu'an Economic Development Zone and to cooperate in industry exchanges and talent interaction, according to a statement posted on the NIO app.

The industrial park is positioned as a high-end aluminum die-casting low-carbon recycling park, and the two sides are committed to making it a pilot demonstration park of circular economy in China.

(William Li, Founder, Chairman and CEO of NIO, speaks at the signing ceremony)

The first phase of the park is planned to cover an area of about 900 mu (0.6 square kilometers) and will introduce vehicle dismantling, aluminum and other material recycling, aluminum material melting, aluminum die-casting and wheel manufacturing and other component companies to create a full industrial chain of aluminum die-casting low-carbon cycle, NIO said.

The first phase of the park is scheduled to be completed and put into operation in the first half of 2023, when it will have an annual capacity of 300,000 tons of aluminum die-casting, with an expected annual output value of RMB 10 billion yuan, according to NIO.

After the first phase of the project is completed and put into operation, aluminum die-casting products for NIO vehicles will reduce carbon emissions by about 50 percent, the company said.

The partnership is a new milestone in NIO's supply chain efforts, and the company will continue to advance its strategy of bringing the supply chain closer, said Kevin Pan, NIO's assistant vice president of supply chain development, adding that NIO welcomes more partners to join the low-carbon recycling business and work together to build a sustainable industry chain.

NIO and officials from the city of Lu'an held a signing ceremony in which the first five companies that will establish facilities at the park signed agreements with the city.

This is the latest move by NIO to increase its industrial presence in Anhui province. The company's production site is located in Hefei, the province's capital city.

On April 29, 2021, the Hefei municipal government and NIO jointly announced the official start of construction of NeoPark. The 16,950-mu (11.3 square kilometers) park is expected to have an annual capacity of 1 million vehicles and 100 GWh of batteries, with an upfront investment of RMB 50 billion.

Hefei's goal is that NeoPark will have an annual output value of over RMB 500 billion and bring together more than 50,000 talents from around the world to become one of the world's leading gathering places for the intelligent electric vehicle industry chain.