On June 5th, NIO's co-founder and president, Qin Lihong, confirmed that NIO's third factory (F3 factory) is located in the Xinqiao Intelligent Electric Vehicle Industrial Park in Hefei. The construction has recently begun, with a planned single-shift production capacity of 100.000 units. This factory will be used for the production of upcoming NIO and "LeDao" brand products.
According to information from Tianyancha, NIO Auto Technology (Anhui) Co., Ltd.'s third manufacturing base branch was established on May 14. with Qin Lihong as the person in charge. The business scope includes the production of road motor vehicles.
Why Build a Third Factory?
NIO explained that the construction of the third factory is driven by the strong sales of the NIO brand and the company’s long-term strategy. The existing two factories have already reached their designed single-shift capacities. With the launch of new products, the current production capabilities can no longer meet market demand.
Currently, NIO has two fully operational vehicle manufacturing plants, both located in Hefei.
The NIO Hefei Advanced Manufacturing Base (F1 factory) is responsible for producing most of NIO’s models, including the ES8. ES6. EC6. ET7. and ES7. After production line upgrades, the maximum annual capacity can reach 300.000 units.
Located in the Xinqiao Intelligent Electric Vehicle Industrial Park, NIO's second advanced manufacturing base (F2 factory) began operations in the third quarter of 2022. primarily producing the ET5. ET5T, ES8. and EC7. The designed annual capacity is also 300.000 units.
The F3 factory, which has just started construction, is located in the same NIO Auto Industrial Park, Neo Park, as the F2 factory. The park was originally approved for a total capacity of 1 million units, comparable to Tesla's Shanghai Gigafactory (1.1 million units). In fact, the F2 and F3 factories are different phases of the planned construction in the Neo Park.
Market Performance
NIO achieved a historic high in May of this year.
Data shows that NIO's new vehicle deliveries in 2021-2023 were 91.429. 122.486. and 160.038 units, respectively, showing a continuous upward trend. In 2024. total deliveries in the first quarter were 30.053 units, a year-on-year decline of 3.2% and a month-on-month decrease of 39.9%. However, in May, NIO delivered 20.544 new vehicles, an increase of 233.8% year-on-year and 31.5% month-on-month, setting a new record for NIO. NIO expects its vehicle deliveries in the second quarter of 2024 to be between 54.000 and 56.000 units, representing a year-on-year growth of approximately 129.6% to 138.1%.
Focus on LeDao ONVO
The third factory will primarily produce "LeDao ONVO," NIO's second brand.
On May 15. NIO officially launched its second brand, LeDao, and its first model, LeDao L60. was unveiled and made available for pre-order with a starting price of 219.900 yuan. The model is set to be launched and delivered in September. The LeDao L60 is planned to be produced first at the F2 factory, with mass production scheduled to start in September. NIO stated that pre-sale orders for LeDao have exceeded internal expectations by twofold.
NIO’s target sales for this year is 230.000 units. As of May, NIO’s cumulative sales in 2024 stood at 66.217 units, achieving 28.7% of its target. This means that in the remaining seven months, NIO needs to complete over 70% of its sales target to meet its goal. It appears that the LeDao brand may become a major contributor to NIO’s sales in the next phase.
Additionally, NIO's third brand, "Firefly," is also accelerating its development. This brand will focus on mini cars, with a price range of 100.000 to 200.000 yuan. It is expected to debut in China by the end of this year, with official deliveries scheduled for the first half of next year.
Strategic Planning and Future Development
Given the existing production capacity, NIO may not immediately need a new factory. However, considering the sales growth of the NIO brand and the introduction of new brands, it makes sense to plan production capacity in advance.
With the first and second factories both located in Hefei, the decision to build the third factory nearby is strategic.
In fact, even before NIO's official announcement, there were online reports as early as March of this year about the F3 factory's imminent construction. The project has a total investment of 11 billion yuan, a maximum capacity of 600.000 units, and an annual output value of 180 billion yuan. The factory is located in the Hefei-Xinzhou Cooperative Zone within the Xinqiao Intelligent Electric Vehicle Industrial Park.
It is noteworthy that the Hefei-Xinzhou Cooperative Zone is an important platform for inter-city cooperation and development in the Hefei metropolitan area. Unlike traditional aid projects, this is a joint construction where both parties share the revenues and responsibilities equally, with construction costs split 50-50. Leveraging NIO's vehicle manufacturing base, Huainan has attracted 45 supporting companies to the area, fostering industrial division of labor and cooperative win-win opportunities.
Additionally, there are reports that NIO’s fourth vehicle manufacturing factory will be located in the Chuzhou Economic Development Zone in Anhui Province and will produce the Firefly. This factory will integrate the facilities of the former Cheetah Automobile factory.
