Nio Latest Addition to China's List of Permitted EV Manufacturers

Electric vehicle maker Nio has been added to China's Ministry of Industry database, allowing the company to produce vehicles in China, according to China's Ministry of Industry website. The website did not provide information on when a manufacturing license will be issued to Nio, which has been producing electric vehicles under a contract with Anhui Jianghuai Automobile Group (JAC) since 2018.

Obtaining the manufacturing license will address some of the Nio-related downsides of JAC's plan to buy some assets from two factories that manufacture Nio electric vehicles. Last October, the state-run newspaper China Securities Journal reported JACand's acquisition plans. Nio said at the time that that sale would not affect its future production operations.

The granting of a manufacturing license to Nio marks a shift from Chinese authorities, who have been wary of accepting new investment amid a fierce and deepening price war spanning more than 40 years.

Tesla Inc has yet to receive regulatory approval to proceed with its Shanghai factory expansion plans, Reuters reported in June. US luxury electric vehicle maker Lucid Group has been told a deal is unlikely, sources told Reuters.

To produce and sell vehicles in China, you must obtain approval from the National Planning Commission and then the Ministry of Commerce, Industry and Energy. The last electric vehicle maker to receive two licenses was Shandong electric vehicle maker Sinogold in May 2019.

Nio ranked ninth in first-10-month electric vehicle sales in China with 126,067 units, according to data from the Association of Passenger Vehicles from China. The company is working to improve productivity by reducing staff and delaying long-term investments to increase efficiency and reduce costs in the face of increased competition.