SHANGHAI/BEIJING: Nio announced it will take over some factory assets from partner Anhui Jianghuai Automobile Group (JAC) as the Chinese electric car maker moves closer to in-house production to reduce manufacturing costs.
In October, state-run JAC put up for sale the assets of two factories known as F1 and F2, where Nio had been producing electric vehicles (EVs). Nio said in an exchange filing on Tuesday that it will take over some of the fixed assets and equipment of the two factories from JAC for a price of 3.16 billion yuan ($442.19 million).
A separate JAC statement said state-owned industrial park developer Hefei Henchang Intelligent Technology will buy one of the factory’s buildings and land use rights for 1.42 billion yuan.
Nio did not elaborate on how the acquisition would affect future joint production with JAC.
After Nio reported a 10.8% year-over-year increase in its net loss, founder and CEO William Lee said on a conference call late Tuesday that if Nio were to keep all production entirely in-house, manufacturing costs would be lower. told analysts it would be cut by 10%. For the third quarter.
Nio has been designing production lines and developing manufacturing technology for factories in-house, but since 2019, a joint venture with JAC has been operating and managing the factory, and JAC is mainly responsible for the assembly workers. He said he was in charge of hiring.
China’s state planning authorities are restricting the expansion of the auto industry’s production capacity and are reluctant to approve new entrants into the crowded market.
Regulators in 2018 allowed Nio to manufacture and sell EVs in China through a partnership with JAC, through which Nio paid JAC fees for each vehicle it produced.
The nine-year-old company was recently added to China’s Ministry of Industry database that allows companies to produce cars domestically.
According to data from the China Passenger Vehicle Association, Nio ranked ninth in China with sales of 126,067 EV and plug-in hybrid vehicles in the first 10 months.
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