The first Firefly model has seen a design freeze in late June and is expected to enter the mold development phase in early August, allaying employee fears that the project could be scrapped, according to local media.

(Image credit: CnEVPost)

's (NYSE: NIO) sub-brand, codenamed Firefly, which targets the mid- to low-end market, has made major progress on the development of its first model, after internal staff fears that the project could be canceled.

Firefly's first model has already seen a design freeze at the end of June and is expected to enter the mold development phase in early August, local media outlet Auto Pix said in a report today.

This means that the Firefly project will go ahead, much to the relief of nearly 1,000 employees, the report said, citing one of the project's management, adding that there were previous concerns about the project being canceled.

Nio's management first confirmed in August 2021 that the company would enter the lower-priced mass market through a sub-brand, which was mentioned in subsequent communications under the internal codename Alps.

On August 1, 2022, 36kr reported that the electric vehicle (EV) maker was planning to launch a third brand in addition to Nio and Alps to cover the lower-middle market of under RMB 200,000 yuan ($27,900).

On January 26 this year, Nio co-founder and president Qin Lihong said at a face-to-face communication event with car owners that Nio was preparing models under the sub-brand codenamed Alps, with deliveries expected to start within 2024.

The company's other sub-brand, codenamed Firefly, was also in the planning stages and will be delivered first to European consumers, Qin said at the time.

Nio's smaller model would debut in Europe, with deliveries expected in the third quarter of 2024, according to Qin.

Auto Pix reported today that the R&D team for the Firefly project is located at the Nio China headquarters site in Hefei, Anhui province.

For comparison, the Nio brand's core technology R&D, vehicle development, and marketing teams are located at its global headquarters in Shanghai.

At Nio China's headquarters building in the science and technology park in Hefei's Shushan district, its 16th floor is reserved for the Firefly project's team of engineers, except for a conference room in the center that can accommodate nearly 30 people, according to Auto Pix.

After a period of silence, the project's first model finally saw a design freeze at the end of June, according to Zhang Shuo (a pseudonym), an engineer at the Firefly project, according to the report. "I barely had time to leave my seat to fetch a glass of water for the past few days," Zhang said.

Nio has been cautious with the Firefly project, and although it has reached the design freeze stage, right now its Shanghai-based project management team is still coming up with new requirements, according to the report.

The project's development team still has a lot of design changes to complete before the mold development, the report said.

As is common in the automotive industry, after mold development, a new car needs to go through a trial production phase of experimentation and optimization before it can finally move to mass production (SOP), a process that takes at least another six months, the report noted.

Nio has started becoming more cautious about cash management due to weak deliveries in the past few months.

Nio will manage cash flow carefully, and some fixed asset investments, R&D projects will be delayed, the company's management said in an analyst call on June 9 following the announcement of its first-quarter earnings.

Nio's internal team has different views on Firefly, with the project's team worrying some time ago that it might be canceled, but now it's finally moving forward, Auto Pix quoted Nio engineer Xu Lei as saying.

Firefly's other codename within Nio is NB3 (new business 3), which sits after Alps (NB1), the chip business (NB2), but before the mobile phone business (NB4), the report noted.

Nio's factory for the Firefly project is located in Chuzhou, Anhui province, which was formerly the factory of defunct carmaker Leopard, Auto Pix's report said.

On February 21, local media outlet Cailian, citing sources familiar with the matter, reported that models for Nio's Firefly project will be built at its plant in Chuzhou.

($1 = RMB 7.1711)

NIO's F4 plant will be located in Chuzhou to produce models for Firefly sub-brand, report says