NIO Secured Official Approval for Independent Car Manufacturing in China

On Monday, the Chinese electric vehicle brand “NIO” appeared in the “Vehicle Production Enterprise Credit Information Management System” of China’s Ministry of Industry and Information Technology (MIIT). This signifies that NIO, which has previously operated in an OEM (Original Equipment Manufacturer) mode, has obtained official approval from the Chinese authorities for independent car manufacturing.

As cited by Tencent News from an anonymous source, car manufacturers in China need to pass two “checkpoints” to obtain qualifications: the National Development and Reform Commission, and the MIIT. Generally speaking, the first checkpoint is the most difficult to pass. NIO‘s appearance in the MIIT’s Vehicle Production Enterprise Credit Information Management System implies that it passed both checkpoints nine years after its establishment, finally obtaining the qualification for independent car manufacturing.

Obtaining auto manufacturing qualifications is a widely recognized challenge in the industry. As per a senior industry insider, this is due to the historical evolution of the auto industry in China. Previously, the industry experienced rapid growth, and almost every province was developing its own auto industry, resulting in serious redundancy and overcapacity. Consequently, the government tightened regulations. The qualifications are now given very cautiously, and the conditions have become stringent. 

In practice, this also means that NIO cars no longer need to carry the “JAC Motors” tail mark. Before this, NIO used an OEM model for car manufacturing. Without the qualification, NIO cars were manufactured through JAC, so the full name of a NIO car is in fact “JAC NIO“. In contrast, NIO‘s competitors Li Auto and Xpeng took a different approach – purchasing qualifications. Li Auto, through the acquisition of Lifan Motors, and Xpeng Motors through the acquisition of Guangdong Foday Automobile to obtain production qualifications.

However, an individual close to NIO‘s senior management told Tencent News that, “Li Bin [CEO of NIO] doesn’t want to buy qualifications. He doesn’t want to spend that money. He believes the money should be spent on the customers.”

NIO‘s acquisition of qualifications may open up possibilities for other companies to apply for qualifications. Currently, Xiaomi Motors is using the qualifications of BAIC Offroad. Baidu, due to not having obtained qualifications, has its jointly owned Jidu Motors resort to using Geely’s qualifications.

As of the time of writing, NIO has not yet issued a public statement.

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