A Nio Inc. ES6 electric SUV at a battery swap station inside a parking lot in Shanghai on March 1, 2021.
Qilai Shen | Bloomberg | Getty Images
BEIJING — Chinese electric car start-up Nio said Tuesday a global chip shortage will force it to manufacture fewer cars in the second quarter.
High demand for electronics amid the coronavirus pandemic and pressure from U.S.-China trade tensions on the highly specialized semiconductor supply chain have contributed to a backlog in chip manufacturing.
Major automakers have had to cut production as a result, with China-based Nio the latest to announce such reductions.
The company had ramped up production capacity in February to 10,000 vehicles a month, an increase from 7,500 previously, founder William Li said in a quarterly earnings call Tuesday. But a shortage in chips and batteries means Nio will need to fall back to the 7,500 level in the second quarter, he said.
Nio predicts strong deliveries
Despite competition from Tesla, Nio remained ahead of its start-up rivals in terms of vehicle sales.
The company delivered 7,225 vehicles in January and 5,578 in February amid the week-long Lunar New Year holiday. With a forecast of 20,000 to 25,000 deliveries in the first quarter, Nio anticipates deliveries will rise to at least 7,197 cars in March.
Nio founder Li said that pre-orders for the et7 sedan revealed in January have exceeded that of the company’s other models, but declined to share specific figures. The et7 is Nio’s first non-SUV consumer car and is set to begin deliveries next year.
Li added the company remained on track with plans to enter Europe later this year.
Shares of New York-listed Nio fell 4% in extended-hours trading after reporting a fourth-quarter earnings loss of 0.93 yuan (14 cents) a share. That’s greater than the 0.39 yuan loss per share predicted by analysts, according to FactSet.
The company attributed a nearly 33% quarterly increase in net losses — to 1.39 billion yuan ($212.8 million) in the last three months of 2020 — primarily to the depreciation in the U.S. dollar.
Nio shares soared more than 1,000% last year after the struggling start-up received a roughly $1 billion capital injection from state-backed investors, and traders piled into the stock alongside a surge in Tesla’s shares.
Looking ahead, Nio expects total revenue of 7.38 billion yuan to 7.56 billion yuan in the first quarter, up from 6.64 billion yuan in the fourth quarter.