Chinese electric vehicle maker NIO (NIO +0.48%) first said it would be impacted by the global semiconductor shortage in late March when it announced a five-day factory closure. The company still managed to hit its original production target range for the first quarter, but the numbers are now being affected.
Today, NIO announced May 2021 deliveries of 6,711 vehicles, a 5.5% drop versus April. The company said in a statement that vehicle deliveries for the month were "adversely impacted for several days due to the volatility of semiconductor supply and certain logistical adjustments."
NIO ES6 electric SUV. Image source: NIO.
Though May represented a monthly sequential drop, deliveries were still 95.3% higher than in the same period last year on strong demand. The growing demand in China is what prompted Citigroup analyst Jeff Chung to upgrade NIO to a buy rating today, telling clients in a note that the automaker should continue to see accelerating demand in the coming months, according to CNBC. Chung advised clients to buy on any weakness, saying he sees more than 50% upside for the stock.
Some of that confidence might have come from comments from NIO management, as the company reiterated its previous second-quarter delivery guidance of 21,000 to 22,000 vehicles. It said it will be able to accelerate deliveries in June to compensate for the delays experienced in May. The midpoint of that quarterly delivery guidance would represent a gain of 7.2% over first-quarter shipments.
