Nio's F3 plant is located in Hefei's NeoPark, and with the subsequent launch of new products, the production capacity of the existing 2 factories can no longer meet demand, Qin Lihong said.

Nio (NYSE: NIO) co-founder and president Qin Lihong confirmed that the company has begun construction on a third factory, and offered some different information, after a report earlier today sparked discussion.

Nio's third factory, located at NeoPark in Hefei, Anhui province, has recently begun construction, local media outlet Lanjinger quoted Qin as saying in a report today.

The new plant will have a single-shift capacity of 100,000 units per year and will be used for both Nio-branded and Onvo-branded products, Qin said.

Given the recent hot sales of Nio-branded models and the company's long-term strategy, production at its two existing plants in Hefei is already at the designed single-shift capacity, Qin said, according to the report.

With subsequent new product launches, the production capacity of the existing plants is no longer able to meet market demand, Qin said, adding that Nio does not have an overcapacity problem.

Earlier today, Reuters cited three people familiar with the matter as saying that Nio has been approved to build a third factory, known as F3, which would raise its total capacity to 1 million units, almost the same as Tesla's Shanghai factory.

Nio said the information is false, according to the Lanjinger report today.

In addition, the Reuters report mentioned that the F3 factory is located in Huainan, Anhui province, and will mainly produce cars for Nio's new affordable car brand, Onvo.

Qin's latest response implies that the F3 plant will be located near the F2 plant, rather than in Huainan, which is about 100 kilometers away from Hefei.

Nio did not obtain its own qualifications to build cars in its early days, and its vehicles are produced by partner Anhui Jianghuai Automobile Group (JAC).

Nio's vehicles are produced at two factories in Hefei, including the F1 factory, or JAC Nio Advanced Manufacturing base, and the F2 factory in NeoPark, which is the new industrial park's first project.

Nio has acquired the assets of these two factories from JAC after it gained qualification to build cars late last year.

NeoPark is an electric vehicle industrial park jointly promoted by Nio and the Hefei municipal government, and on April 29, 2021, the two sides jointly announced the official start of construction of the park.

NeoPark covers an area of 16,950 mu (11.3 square kilometers) and can accommodate a vehicle capacity that is expected to be able to reach one million vehicles per year and a battery capacity of 100 GWh per year, William Li, Nio's founder, chairman, and CEO, said when announcing the start of construction of the park in 2021.

It's worth noting that that vehicle capacity and battery capacity is just the upper limit of what NeoPark can accommodate, not what's already built or planned.

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