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2021-03-27

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NIO Suspends Production for 5 Days on Chip Shortage

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On March 26th, NIO announced it would temporarily suspend production for five working days due to a shortage of semiconductors.

In the 2021Q1 earnings call early this March, William LI said:

Global chip shortage has strong impact on supply chain, which will influence our production in Q2. Currently it's enough to meet production plan, but situation changes every day. In Q2, the entire automotive industry might be hit by chip shortage. Our team has been working on this since last year. We even contacted chip companies directly for bridging the entire chip supply chain. Indeed, it should be enough to meet our demand viewing from the quantity of Q2, but the risk is still quite high.

William LI also said that the production capacity of the entire supply chain of NIO had reached 7,500 vehicles in January. Hence, the production capacity in 5 working days is about 1,250. In the conference call, Steven FENG, CFO of NIO, also said that the company expects to deliver 20,000 to 20,500 vehicles in the first quarter of 2021. Suspension of production for 5 days might not have a great impact on the total deliveries.

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