Shanghai (ZXZC)- NIO announced on May 24 it has signed agreements with Anhui Jianghuai Automobile Group Co.,Ltd. (JAC) and Jianglai Advanced Manufacturing Technology (Anhui) Co.,Ltd. (Jianglai) for the joint production of NIO's vehicles and relevant fee arrangements, marking a continuity of the EV contract manufacturing service JAC had offered to NIO for five years. 

Photo credit: NIO

According to NIO, JAC is a Chinese state-owned car manufacturer who is currently responsible for manufacturing NIO's vehicles in delivery, including the ES8, the ES6, and the EC6 at the JAC-NIO manufacturing plant in Hefei. Jianglai is a 51:49 joint venture between JAC and NIO.

Under the joint manufacturing arrangement, from May 2021 to May 2024, JAC will continue to manufacture NIO's vehicles, including the ES8, the ES6, the EC6, the ET7, and potentially other NIO's models. To meet the growing demands for NIO's vehicles, NIO will enlarge its annual production capacity to 240,000 vehicles (calculated based on 4,000 work hours per year).

NIO will be accountable for the design and R&D of vehicles, the supply chain management, the manufacturing technologies, and the quality management and assurance, according to NIO's announcement. Besides, Jianglai will take charge of the assembly of auto parts and the operational management.

Unlike Li Auto and XPeng who own their self-built plants, NIO has been using JAC as a contract manufacturer rather than constructing its own plant. In April 2016, NIO and JAC Group signed a manufacturing cooperation framework agreement, confirming a plan to produce 50,000 cars in the first phase. The contract came into force from April 1, 2016, and remained effective for five years.