Readjust using these instructions to get it spot on:
From
http://www.foldabikes.com/Talk/Docs/gear_manual.pdf :
"With [bike] UNFOLDED follow gear shifting cable to point of entry into rear wheel. Here you will find a small chain and rod
assembly attached to the cable end where it is attached with a screw in barrel fitting secured by small knurled lock nut. Loosen lock nut (gently use two pairs of pliers if necessary) and disassemble cable from indicator chain assembly.
Now ensure that chain and rod assembly is screwed into hub completely. Turn back maximum of half a turn if necessary to ensure sure chain runs freely through round shouldered indicator nut on wheel axle and reattach indicator chain to cable assembly.
Select second gear on the handle bar gear control. Looking through the “window” in the right had axle nut turn the barrel nut cable adjuster until the end of the indicator rod as attached to indicator chain is exactly even with the end of the axle. Note: The indicator rod is attached to end of shifting chain. Now spin rear wheel with pedal crank and reexamine to assure proper adjustment. Finally tighten lock nut against barrel nut."