Nio Begins Construction At Its Second Factory, CEO Says Speed Is Impressive

Nio Inc NIO has begun construction of its second factory at Neo Park in Hefei in China’s Anhui province, CnEVPost reported Thursday.

What Happened: The second unit is slated to commence production in the third quarter of 2022, as per William Li, founder and CEO of Nio. 

"It's very fast, and I looked at it yesterday and the plant has already started building the structural part," said Li, as per CnEVPost.

The Hefei municipal government and Nio had jointly announced the official opening of the park on April 29.

The facility covers 16,950 acres and is likely to have an annual capacity of 1 million vehicles and 100 GWh of batteries with an advance investment of RMB 50 billion ($7.83 billion). 

Li said that battery packs would be transported through a “logistics corridor” eliminating the need for vehicles in the park. 

On Wednesday, Nio shares closed nearly 1.9% lower at $42.74 in the regular session and fell another 1.01% in the after-hours session to $42.31.

Why It Matters: The Nio CEO revealed that the average vehicle logistics mileage is only 901 kilometers, which saves RMB 3000 ($470) to RMB 4,000 ($626.60) to produce one vehicle compared with rivals such as Bayerische Motoren Werke AG BMWYY, Volkswagen AG VWAGY marque  Audi and Daimler AG DDAIF unit Mercedes-Benz, CnEVPost reported. 

Meanwhile, Nio’s U.S. rival Tesla Inc TSLA has halted plans to expand its Shanghai Gigafactory on account of simmering U.S.- China tensions.

See Also: Nio Sold $31M Factory Equipment To Tesla To Get Through A Difficult Time

Nio confirmed to Benzinga that cities can begin bidding for hosting Nio Day 2021, which is an annual event for both the company’s users and guests. The last iteration was held in Chengdu.

This month, Nio confirmed that the dip in May deliveries was not due to the ongoing global chip shortage, but due to a change made by the State Taxation Administration (STA) in China’s auto invoice rules.

Read Next: Nio Rival Xpeng Says It Could Beat Q2 Delivery Target Despite Chip Shortage Concerns

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Photo Courtesy: Nio