Nio (9866.HK) said it would take over some plant assets from partner Anhui Jianghuai Automobile Group (600418.SS) (JAC) as the Chinese electric vehicle maker moves closer to producing cars on its own to save manufacturing costs.
In October, state-owned JAC put up for sale the assets at the two plants, known as F1 and F2, where Nio has been producing its electric vehicles (EVs). Nio said in an exchange filing on Tuesday that it would take some fixed assets and equipment at the two factories from JAC at a price of 3.16 billion yuan ($442.19 million).
Hefei Hengchuang Intelligent Technology, a state-owned industry park developer, will buy the buildings and land use rights of one of the plants for 1.42 billion yuan, a separate JAC statement showed.
Nio didn't elaborate how the acquisition would affect its joint production with JAC onwards.
Nio's manufacturing costs will be reduced by 10% if Nio brings all production fully in-house, founder and chief executive William Li told analysts on a call late Tuesday after the company reported a 10.8% year-on-year rise in net loss for the third quarter.
Nio had said it independently designed the production lines and developed the manufacturing technologies at the factories, while a joint venture with JAC has been operating and managing the plants since 2019, with JAC mainly in charge of hiring assembly workers.
China's state planner has been restricting the growth of production capacity in the auto industry and is reluctant to approve new players to join the overcrowded market.
Regulators allowed Nio to produce and sell EVs in China via the collaboration with JAC in 2018, through which Nio paid JAC commission fees on each car it produced.
The nine-year-old company was recently added to a Chinese industry ministry database permitting companies to produce vehicles in the country.
Nio ranked ninth in terms of sales of EVs and plug-in hybrids in the first 10 months in China with 126,067 units, according to data from China Passenger Car Association.
($1 = 7.1415 Chinese yuan renminbi)
