Nio’s headquarters in Shanghai. Photo: Li Zhang / Unsplash
Who said that the electric vehicle market is no longer lucrative? Despite declining sales, Nio believes otherwise. The Chinese manufacturer is starting the construction of a third electric vehicle factory.
A Third Factory for Nio
Chinese company Nio believes that its two factories can no longer meet the current demand. The company has just begun the construction of a new production site in China. Qin Lihong, president and co-founder of Nio, recently confirmed the news. With an annual capacity of 600,000 units, this new factory will be used to manufacture electric vehicles for the Nio and Onvo brands.
With its three factories, the manufacturer will be able to produce 1 million electric vehicles per year, approximately the same as Tesla’s only factory in Shanghai (approximately 1.1 million units per year). Unlike some of its competitors in China, the brand ensures that it does not have “overcapacity issues.” However, the results for the first quarter were disappointing.
Declining Sales, But Not Alarming
The company reported lower-than-expected results for the first three months of the year. Between January and March, Nio delivered “only” 30,053 vehicles, including 17,809 SUVs and 12,244 sedans. While deliveries decreased by 3.2% year-over-year, they plummeted by 40% compared to the fourth quarter of 2023. Between October and December, Nio had sold 50,045 units.
Nio’s revenue dropped by 42% compared to the previous quarter, now standing at 1.26 billion euros. This decline was “expected” according to the manufacturer. The company had expected to deliver between 31,000 and 33,000 models. However, it anticipates that deliveries in the second quarter will be much higher. Nio aims to deliver between 54,000 and 56,000 units between April and June.
+51% Since the Beginning of the Year
May was an excellent month for Nio: the company delivered 20,544 vehicles, an increase of 234% compared to the previous year. With 66,217 vehicles delivered so far in 2024 (as of May 31), electric vehicle deliveries at Nio have increased by 51%. The company now offers a complete range of electric sedans and SUVs in different segments.
Nio is also placing a lot of emphasis on its new Onvo brand. The first model, called L60, will compete with the Tesla Model Y. It will start at 219,900 yuan in China (approximately 27,800 euros), while Tesla’s SUV starts at 249,900 yuan (31,600 euros). The L60 will also be available in Europe, and the brand hopes to sell 20,000 units per month.