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NIO Electric Vehicle Production Hit by Semiconductor Shortage

By Howard Smith - Updated Mar 26, 2021 at 9:45AM

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The Chinese EV start-up expects to lose up to 1,000 vehicle deliveries.

Chinese electric-vehicle maker NIO (NIO -4.11%) said today it will halt production at its Hefei factory for five days due to the global semiconductor shortage. Production will be suspended beginning March 29 for five working days. 

The company said the shutdown will reduce first-quarter deliveries to approximately 19,500 vehicles, compared to the prior estimate of 20,000 to 20,500. By comparison, the company delivered 17,353 vehicles in the fourth quarter of 2020. 

NIO ES8 electric vehicle

NIO ES8 electric vehicle. Image source: NIO.

The semiconductor shortage is hitting many automakers around the world, including Ford (F -4.79%) and General Motors (GM -3.74%). Tesla (TSLA -8.76%) also took a two-day production pause last month at its California plant for what it called parts shortages. Automakers are shuffling available semiconductors across factories to maintain production on the most-profitable vehicles. 

Even with the lost production, NIO's new estimated first-quarter production level of 19,500 vehicles would represent more than 400% growth over deliveries reported in the 2020 first quarter. NIO more than doubled its production in 2020 compared to the prior year, and continues to work toward profitability. 

In a January 2021 presentation, the company introduced its new ET7 luxury sedan, which will be the first sedan offered by the company. It will provide a range of about 621 miles, according to the company. That's farther than Tesla's Model S maximum range of 402 miles. Competition is growing as the Chinese electric-vehicle market expands. Tesla began deliveries of its Model Y crossover SUV out of its Shanghai plant earlier this year, and other Chinese competitors are also ramping up production. 



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