Chinese electric car startup Nio said that a global chip shortage would push it to manufacture fewer cars in the second quarter on Tuesday.
Heavy demand for electronics among the coronavirus pandemic and the pressure of US-China trade tensions on the very specialized semiconductor supply chain has led to a backlog in chip manufacturing.
As a result, major automakers have to cut production, with Chinese company Nio the latest to announce such cuts.
The company had expanded production capacity in February to 10,000 vehicles per month from 7,500 earlier; founder William Li said in a quarterly earnings call on Tuesday. But a paucity of chips and batteries implies that Nio will have to fall back to the 7,500 level in the second quarter, he said.
Despite competition from Tesla, Nio has continued ahead of its startup competitors in terms of vehicle sales.
The company produced 7,225 vehicles in January and 5,578 in February during the weeklong Lunar New Year holiday. With a forecast of 20,000 to 25,000 deliveries in the first quarter, Nio anticipates deliveries to grow to at least 7,197 cars in March.
Nio founder Li told the et7 sedan’s pre-orders announced in January surpassed those of its other models but declined to share specific numbers. The et7 is Nio’s first non-SUV mainstream car and is expected to start deliveries next year.
Li continued that the company remains on track and intends to enter Europe later this year.
According to FactSet, New York-listed Nio shares dropped 4% during extended business hours after recording a loss of 0.93 yuan (14 cents) in the fourth quarter per share. That’s more than the loss of 0.39 yuan per share predicted by analysts.
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