May 31, 2019 / 10:24 AM / a month ago

EV maker Nio plans Beijing plant, will likely seek a partner: CEO

BEIJING/SHANGHAI (Reuters) - Chinese electric vehicle (EV) maker Nio Inc is keen to build a production base in Beijing and will likely seek a manufacturing partner, Chief Executive Officer and founder William Li said this week.

His comments come after Nio said on Tuesday that it would form a joint venture with Beijing E-Town International Investment and Development Co Ltd, 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, but this is insufficient, Li told a conference on Wednesday, according to a transcript provided by the company.

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

Nio delivered 3,989 units 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 a big room for new EV makers. However, fierce competition, subsidy reduction and a slowing economy having raised concerns over their performance.

Nio’s U.S.-listed shares hit a record low after BofA-ML downgraded the stock to “underperform”, citing weak orders for ES8 and ES6 models due to purchase subsidy cuts for EVs, reduced free cash flow, higher refinancing risks, increased competition from Tesla and rich valuation.

Reporting by Yilei Sun in Beijing and Brenda Goh in Shanghai; Editing by Subhranshu Sahu

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