China has imposed restrictions on car production over the past decade amid concerns about overcapacity. Nio had previously been producing cars under JAC's qualification.
(Image credit: CnEVPost)
Nio (NYSE: NIO) has received independent vehicle production qualifications, a new government filing shows, marking a major milestone in the company's history.
The Chinese electric vehicle (EV) maker has entered China's Ministry of Industry and Information Technology's Vehicle Manufacturing Enterprise Credit Information Management System, meaning it will be able to produce cars under its own name.
Nio was not previously in the system, as its vehicles were produced under the name of its partner, Anhui Jianghuai Automobile Group (JAC).
The address for the production of Nio's vehicles is 299 Baita Road in the Hefei Economic and Technological Development Zone in Anhui province, the document shows. That's the same location as Nio's F2 plant at NeoPark, which CnEVPost visited late last month.
Nio vehicles are currently produced at two factories in Hefei -- F1 and F2 -- with the former officially opening in 2018 and the latter in September 2022.
China requires local automakers to have qualifications issued by economic planner the National Development and Reform Commission to produce vehicles under their own brand names.
Nio previously had no such qualifications; it had been using JAC's qualifications, and the vehicles are produced at the two factories it built in partnership with JAC, with Nio paying for contract production.
The company's local counterpart, Xpeng (NYSE: XPEV), also initially adopted contract production, with its first production vehicle, the G3, being built by Haima Motor.
Xpeng's contract production agreement with Haima ends on December 31, 2021, after which Xpeng produces the vehicle using the production credentials it gained through an acquisition.
Li Auto (NASDAQ: LI) gained its own production credentials through an acquisition before it began mass production of its first model, the Li One.
At the time of Nio's founding in 2014, China's vehicle capacity was already large, and regulatory authorities had imposed restrictions on vehicle production in order to control capacity, the EV maker's vice president for manufacturing business, Ji Huaqiang, said in an interview with English-language media, including CnEVPost, at the Hefei F2 plant late last month.
Before 2019, the production of Nio vehicles was done by JAC, and later, the two formed a joint venture called Jianglai, which is responsible for the manufacturing process of Nio vehicles as a whole, Ji said.
On March 31, 2021, Jianglai was formally established with a registered capital of RMB 500 million, initially 49 percent owned by Nio and 51 percent by JAC, as previously reported by CnEVPost.
In April 2022, Nio increased its stake in Jianglai from 49 percent to 50 percent.
Notably, obtaining independent vehicle production status paves the way for Nio to fully own the two factories it built jointly with JAC.
JAC on October 19 released plans to transfer billions of RMB worth of factory assets that comprise three asset packages, with Nio's F1 and F2 plants included.
Multiple local media reports said Nio could acquire the assets and seek its own vehicle production credentials.
The three asset packages were listed on the website of Anhui Assets and Equity Exchange on November 7, and December 4 was the deadline, according to documents seen by CnEVPost.
With the transfer of these JAC assets coming to the deadline, rumors emerged on Weibo today that Nio would be the buyer of these assets.
Nio has yet to announce any official information about the qualifications to build cars or the acquisition of the JAC assets.