Chinese Electric Vehicle Manufacturer NIO (NYSE: NIO) said today that it will halt production at its Hefei plant for five days due to the global shortage of semiconductors. Production will be suspended from March 29 for five business days.
The company said the shutdown will reduce first quarter deliveries to approximately 19,500 vehicles, compared with the previous estimate of 20,000 to 20,500. In comparison, the company delivered 17,353 vehicles in the fourth quarter of 2020.
Electric vehicle NIO ES8. Image source: NIO.
The scarcity of semiconductors is affecting many automakers worldwide, including Ford (NYSE: F) and General Motors (NYSE: GM). Tesla (NASDAQ: TSLA) it also took a two-day break in production last month at its plant in California due to what it called a shortage of parts. Car manufacturers are switching from available semiconductors to factories to maintain production on the most profitable vehicles.
Even with the loss of production, NIO’s estimated new production level in the first quarter of 19,500 vehicles would represent a growth of more than 400% over reported deliveries in the first quarter of 2020. NIO more than doubled its production in 2020 compared to with the previous year and continues to work towards profitability.
In a presentation in January 2021, the company presented its new luxury sedan ET7, which will be the first sedan offered by the company. It will provide a range of about 621 miles, according to the company. This is further than the Tesla Model S’s maximum range of 402 miles. Competition is growing as the Chinese electric vehicle market expands. Tesla started delivering its Model Y crossover SUV from its Shanghai plant earlier this year, and other Chinese competitors are also increasing production.
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