NIO is building its third EV plant as it can no longer meet demand

Who said EV sales were slowing? NIO kicked off construction on its third EV plant as the existing two can no longer meet demand. Amid reports that the new plant will boost production capacity to that of Tesla’s Shanghai plant, NIO’s president clarified rumors.

NIO begins construction at third EV plant to meet demand

NIO president and co-founder Qin Lihong confirmed the EV maker has started building its third factory. The new plant will be used to build NIO and Onvo brand electric cars.

Although a Reuters report from earlier today claimed three sources familiar with the matter said NIO’s third factory would raise its total production capacity to 1 million, roughly the same as Tesla’s Shanghai plant, new details have emerged.

The report said NIO’s new factory has been approved with 600,000 annual production capacity, putting the EV maker’s total capacity on par with that of Tesla’s Shanghai plant (1.1 million).

NIO’s president clarified that construction has begun, but the new plant will be able to produce 100,000 units a year on a single shift.

Lihong told Blue Whale News that NIO’s current production capacity (at its two existing plants) had reached its single-shift capacity due to higher demand. In other words, NIO needs to build more EVs, he added, “NIO does not have an overcapacity problem.”

Demand is outweighing production capacity

The news comes after NIO had a record-breaking Month in May, delivering 20,544 EVs, up 234% from last year.

NIO delivered 12,164 electric SUVs and 8,380 sedans. With that, NIO’s cumulative deliveries topped 500,000 (515,811) as of May 31, 2024.

NIO has now delivered 66,217 vehicles YTD, up 51% year-over-year. The sales growth is fueled by the brand’s refreshed lineup.

After opening orders for seven updated models in February, including the 2024 ET5, ET5T, EC6, ES6, EC7, and ES8, the ET7 was the latest model added to the lineup in April.

NIO’s new ET7, powered by a massive 150 kWh esmi-solid state battery pack, broke a record for a mass-produced EV after CEO William Li drove it for 1,145 km (711 mi). The 14-hour event was live-streamed, and the ET7 even had an extra 3% charge left.

After topping 20,000 deliveries last month, several analysts believe NIO’s momentum will continue.

NIO launched the Onvo L60 last month, the first of its new mass-market brand. Starting at $30,500 (219,900 yuan), the new electric SUV undercuts Tesla’s top-selling Model Y, which starts at 249,900 yuan ($34,600) in China.

In a recent investor note, Deutsche Bank analyst Wang Bin’s team said with the new L60 launching in September, “We think Nio’s expectation of monthly >20,000 unit delivery is achievable with boost from Onvo.”

Source: CNeVPost, NIO