The Chinese government is investing in the construction of a huge industrial park called Neo Park in Hefei. An industrial cluster for intelligent electric vehicles will be created there, where hundreds of EV-related companies will be located.
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‘Neo Park’ in the capital of Anhui province will have production capacities for one million electric cars and 100 GWh of batteries per year on an area of 11.3 square kilometres, as well as research and development facilities, according to Chinese media reports on the start of construction. More than 50,000 jobs are planned, including more than 10,000 in research and development. The initial investment is 50 billion yuan (about 6.4 billion euros).
China’s government is not alone in building the industry park. Nio is a major partner in the venture and plans to set up an automobile manufacturing facility there. The industrial park is built in Anhui where, in February 2020, the carmaker signed a framework agreement with the city of Hefei and the Anhui region. This brought Nio commitments of more than ten billion yuan (about 1.3 billion euros). In return, the company committed to building factories and research centres in the city – the basis for Neo Park.
Nio had initially planned to build its own factory in Shanghai or Beijing. But these plans were later put on hold, supposedly for financial reasons. Until now, Nio’s vehicles have been built in a JAC factory in Hefei, which is also how the contact to Anhui came about. JAC is also a joint venture partner of Volkswagen. Since the German company took over the majority in the joint venture, JAC-Volkswagen has been operating under the new name Volkswagen Anhui. Only this week it was announced that VW started construction of its own MEB plant in Anhui.
The industrial park will cover the entire value chain for intelligent electric cars – from the development of software for autonomous driving, “innovative technologies for complete vehicles”, batteries and the construction of the vehicles themselves. The park is expected to reach a production value of 500 billion yuan (64 billion euros) per year.
In addition to the vehicles, Nio is also using the loans from Anhui to invest in the expansion of its infrastructure: in mid-April, the carmaker presented the second generation of its battery exchange station, which is supposed to be able to perform 312 battery changes per day. Only a few days later, Nio announced the ‘Power North Plan’, with which the necessary electric car infrastructure is to be created in the northern Chinese provinces within the next three years, including fast-charging stations, destination chargers and battery exchange stations.
Also this week, Nio announced the long-awaited launch in Europe. Similar to BYD, this will first take place in Norway. “This is Nio’s first foray into the highly competitive European market and a turning point for our global market strategy,” the company said. More details are expected to be available in early May.
Update 10 June 2021: Nio plans to start producing electric cars at its new plant in Neo Park in the third quarter of 2022. This was announced by company boss William Li. Construction of the new Nio production facility has already begun, he said.
“Our ultimate goal is to automate the transportation of most of the battery packs through the logistics corridor without even the need for vehicles in the park. It’s a green, low-carbon, sustainable park,” Li said of the production processes within the park.
That being said, Nio CEO also sees the Hefei location of the park itself as a major advantage, also because it is in central China. “Vehicles made in Hefei can be moved to other cities with the shortest average logistics distance, only 901km. So, cost per vehicle can be 3,000 or 4,000 yuan less than that of BMW, Audi and Mercedes Benz vehicles,” Li said.
It will be the second factory to produce Nio’s electric cars. Until now, they have been built at a JAC factory in Hefei. The manufacturing cooperation between Nio and JAC had only recently been extended until May 2024.
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