According to the website of China’s Ministry of Industry, Nio is now one of the nation’s authorized EV manufacturers. Since 2018, Nio has partnered with Anhui Jianghuai Automobile Group (JAC) to produce EVs on a contractual basis.

Neither the Industry Ministry nor Nio provided any further information about the approval.

The approval will help Nio’s manufacturing operations to continue to run smoothly. Earlier this year, JAC announced that it would sell assets from the two factories that produce Nio EVs. This raised questions as to whether Nio production would be harmed.

The approval is also significant in light of the Chinese government’s previous reluctance to grant new manufacturing licenses. This reluctance has been attributed to China’s overproduction of EVs.

Chinese factories will manufacture 4,800 gigawatt-hours of EV batteries by 2025. This is 300% greater than the nation’s actual market demand.

China’s overproduction is leading to a price war that risks making smaller EV makers uncompetitive. Overproduction has also motivated the EU to launch an investigation into Chinese EV subsidies.

According to Reuters, automakers need permits from both the state planner and the industry ministry to manufacture and sell cars in China. The most recent EV manufacturer to acquire both permits was Sinogold in May 2019.

Tesla and Lucid are currently attempting to get manufacturing authorization. The Chinese government has informed both companies that authorization is unlikely.

Nio occupied the ninth position in terms of EV sales in China during the first 10 months of the year, with 126,067 units sold. The company is attempting to distinguish itself from its competitors through its battery swapping technology, which provides an innovative way of recharging EVs. Nio’s battery swaps are up to 10 times faster than using a DC fast charging station.

To enhance profitability, Nio is making efforts to reduce costs and improve efficiency. The company downsized its workforce by 10% last month.

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