- NIO secured national Excellence-Level smart-factory designation for Factory Two in Hefei, reflecting efforts to boost manufacturing intelligence and defend margins amid intensifying EV price competition.
- Factory Two runs over 90 km of fiber, digital twins, industrial AI covering 80% of manufacturing scenarios, Tantan inspects 1,000 functions in three minutes, Tiantong checks a vehicle in 84 seconds with 99.7% defect recognition accuracy.
- The plant underpins NIO and ONVO production, targeting premium EV segments and faster time-to-market, but scaling, integration of AI into operations and sustaining quality gains present execution and margin risks.
NIO Factory Two, NIO’s advanced manufacturing plant in Xinqiao, Hefei, has been named a 2026 National Excellence-Level Smart Factory.
The designation is part of China’s tiered smart-factory development program, jointly launched by the Ministry of Industry and Information Technology (MIIT) and five other government departments.
The program has four levels: basic, advanced, excellence and pioneer, with a focus on smart manufacturing upgrades. The recognition marks national-level acknowledgment of NIO’s progress in intelligent manufacturing.
NIO established digital infrastructure for smart manufacturing from the outset. At Factory Two, more than 90 kilometers of fiber-optic cable support a digital network covering the production floor.
Digital twins map real-world manufacturing processes into a virtual environment. Industrial AI analyzes the resulting data, identifies patterns and makes decisions that feed back into production. Factory Two uses NIO-developed industrial AI algorithms alongside foundation models and industry-specific models. AI now supports decision-making in 80% of its manufacturing scenarios.
NIO has also improved quality inspection efficiency with proprietary technology.
Tantan, NIO’s new-vehicle full-body AI self-inspection system, combines the vehicle’s onboard hardware and software with cloud-based control and AI algorithms to automatically check more than 1,000 vehicle functions in three minutes. It operates more than 10 times faster than manual inspection.
Tiantong, NIO’s intelligent quality inspection island, inspects one vehicle in 84 seconds, 48% faster than manual checks. Its AI quality-control system achieves 99.7% defect-recognition accuracy, helping shift quality management from detecting defects after production to preventing them during the process.
NIO’s advanced manufacturing system also supports its ONVO brand. The ONVO L60, for example, is produced at the same global Lighthouse Factory as the NIO ES9.
In June, NIO Factory Two was recognized by the World Economic Forum (WEF) as a global Lighthouse Factory.
The WEF said the plant connects in-vehicle AI, the battery-swapping network and digital-twin platforms to cut time to market by 44%, automate 90% of R&D workflows and manage more than 3.6 million vehicle configurations.
The new national designation further recognizes NIO’s integrated capabilities in smart manufacturing and industrial AI.
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