Tesla rival NIO becomes first Chinese EV firm to run out of chips, halts production and lowers output projection
- Shanghai-based company forced to suspend production for five days at assembly line in Anhui province
- Sales target revised downwards less than a month after founder says it has enough chips to support deliveries for the quarter
NIO, China’s leading smart electric vehicle (EV) start-up, has become the first such carmaker to fall victim to a global shortage of automotive chips.
The Shanghai-based company said on Friday that the shortage had forced it to temporarily suspend production for five days at its assembly line in Anhui province.
Moreover, the company said its sales target for the quarter had also been affected – less than a month after founder and chief executive William Li said during an earnings briefing on March 2 that the carmaker had enough chips to support deliveries in this period.
“The overall supply constraint of semiconductors has impacted the company’s production volume in March 2021,” NIO said, adding that it would deliver 19,500 vehicles in the first three months of this year, below a projected target of 20,000- 20,500 units.
The shortage has already ensnared some of the biggest names in the cars industry globally. Ford Motors slashed its first-quarter roll-out, including that of its bestselling F-150 trucks, by 20 per cent, while General Motors said extended down times in Kansas, Canada and Mexico until mid-March would erode its 2021 bottom line by between US$1.5 billion and US$2 billion.
01:16
Tesla exports first China-made cars to Europe with shipment of 7,000 Model 3 electric sedans
The output of conventional cars might drop by up to 700,000 vehicles globally, or about 4 per cent of production worldwide, in the first quarter, according to a forecast last month by IHS Market.