Nio boss William Li pledges to up production after Chinese EV start-up faced yet more supply-chain disruption
- Li has sent dozens of employees to some of its vendors to help minimise future supply-chain constraints
- Investors and customers have been rattled by five major disruptions to production this year caused by China’s coronavirus measures
Although now resolved, that and four previous disruptions to production this year were enough to rattle investors and customers. Nio’s shares have plummeted since their debut in March, while deliveries of cars slumped recently.
“We have deployed dozens of employees to our partners so as to help them increase production of components,” he told customers at the opening ceremony for a new showroom in Dongguan in southern China’s Guangdong province, according to a company statement.
He said the company hoped to allay concerns about slow progress in expanding Nio’s capacity.
Analysts and customers have suggested Nio maintain an adequate inventory of key components to minimise the potential impact of pandemic curbs.
However, Li said the company runs a made-to-order business model and would not normally keep a large stock of spare parts.
He admitted Nio’s business model is distinct from other Chinese carmakers and must fine-tune its manufacturing process to adapt to the existing automotive supply chain.
“Investors and customers who were bullish on Nio and its vehicles will be disappointed if the company fails to deliver enough cars to execute customers’ orders,” said Gao Shen, an independent analyst in Shanghai. “Storing some extra car components for future use is still an option.”
In September, Nio delivered 10,878 vehicles, up 1.9 per cent from a month earlier. The delivery volume declined in October, sliding 7.5 per cent to 10,059 units.
The company said production had returned to normal this month after the problems at the Hefei plant.
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In the first 10 months of this year, Nio delivered 92,493 vehicles to customers, up by a third from a year ago.
But it is likely to miss its full-year sales target of 150,000 units, said Gao.
Nio’s Hong Kong-listed shares have halved from their initial public offering (IPO) price in March, ending 1 per cent lower at HK$79.4 (US$10.16) on Monday.
