According to the Chinese ministry’s website. electric vehicle maker, Nio (NYSE:NIO) has recently been included in a database by the Chinese industry that allows companies to manufacture vehicles within the country, as stated on the ministry's website.
Specific information regarding the timing or issuance of a manufacturing license to Nio was not provided on the website.
For automakers to manufacture and sell cars in China, they are required to acquire permits from both the state planner and the industry ministry. The most recent electric vehicle (EV) maker to obtain both permits was Sinogold, headquartered in Shandong, back in May 2019.
Nio has been collaborating with Anhui Jianghuai Automobile Group (JAC) since 2018, producing electric vehicles under a contract arrangement.
Securing a manufacturing license should help the company ease any worries surrounding Nio amid JAC's intentions to sell certain assets linked to the factories producing Nio EVs.
In October, the state-backed newspaper China Securities Journal disclosed JAC's proposed sale of assets. Nio responded at that time, asserting that any potential sale would not disrupt its forthcoming production operations.
Issuing a production license to Nio signifies a notable change in the approach of Chinese authorities, who have previously exercised caution in approving new production due to concerns about overcapacity and an intensifying price competition involving more than 40 brands.
According to data from the China Passenger Car Association, Nio secured the ninth position in electric vehicle sales during the first 10 months of the year in China, with a total of 126,067 units sold.
Shares of NIO are up 2.87% in mid-day trading on Monday.