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Nio's second product, the ES6 SUV, rolled off JAC's plant in Hefei last week.
Nio plans Beijing plant, will likely seek a partner, CEO says
Reuters | 2019/6/4

BEIJING -- Chinese electric vehicle maker Nio Inc. wants to build a production base in Beijing and will likely seek a manufacturing partner, CEO William Li said.

His comments come after Nio said it would form a joint venture with Beijing E-Town International Investment and Development Co., which will invest 10 billion yuan ($1.45 billion) in the new entity.

Nio's current manufacturing base in the eastern province of Anhui has an annual production capacity of 100,000 units, an insufficient level, Li told a conference on Wednesday, according to a transcript provided by the company.

The automaker, headquartered in Shanghai, operates the Hefei factory with Anhui Jianghuai Automobile Group Co.

Nio delivered 3,989 vehicles in the first quarter, almost half of what it rolled out in the previous quarter.

"We will evaluate all possibilities and will not completely rule out the plan to build the Beijing factory independently. The first choice is still manufacturing with a partner, which is our consistent strategic thinking," Li said.

China's new-energy vehicle market, the world's largest, is booming, and many in the industry still believe that there is room for new EV makers. However, fierce competition, lower government subsidies and a slowing economy have raised concerns over their sales outlook and profitability.

Nio's U.S.-listed shares hit a record low after Band of America Merrill Lynch downgraded the stock to "underperform", citing weak orders for the ES8 and ES6 models due to reduced subsidies for EVs, lower free cash flow, higher refinancing risks, increased competition from Tesla and rich valuation.

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