NIO Suspends Complete Vehicle Production Due to Outbreak

Chinese new energy vehicle firm NIO Inc. announced on April 9 that due to domestic COVID-19 outbreaks, its supply chain partners in Shanghai, Jilin, Jiangsu and other locations have temporarily halted operations. As a result, NIO has suspended its production of complete vehicles. Accordingly, the delivery of vehicles to many customers will be delayed in the near future.

William Li, the founder, chairman and CEO of NIO, issued a statement to customers via the firm’s official app on Saturday, writing: “Affected by the pandemic situation in Changchun, Jilin province, and in Hebei province, some of our auto parts were cut off in mid-March. We barely supported production until last week by relying on our parts inventory. Recently, the COVID situation has aggravated in Shanghai and Jiangsu province. Many partners could not supply goods and could only suspend production.”

NIO added that the company will work with supply chain partners to resume production as soon as possible on the premise of meeting pandemic prevention requirements. As to the company’s timeline for resuming production, no details have yet been disclosed.

One user of the NIO app responded to the CEO’s statement, writing: “It’s not easy, William. The messages in the (WeChat) group suggest that you bartered scallions for salt during the COVID lockdown in the community. The difficulty brought by the pandemic seems so hard. Take care of yourself.”

This is not the first time that NIO has been impacted by pandemic-related supply chain issues. In August of last year, the company delivered 5,880 vehicles, down nearly 26% from July. It attributed the decrease to COVID outbreaks in Malaysia and the eastern Chinese city of Nanjing, hindering the supply of individual parts.

NIO delivered 9,985 cars in March, up 37.6% year-on-year. In Q1 2022, NIO delivered 25,800 new cars, up 28.5% year-on-year.

This suspension of production is likely to directly reduce NIO‘s overall delivery count. As of March 31, the company had delivered 163 ET7s, its latest model. Many more ET7s are due to be transported to different places and may be delivered to users soon.

However, some customers reported via the NIO app that the finished cars couldn’t be transported to their cities. In response, NIO said the transportation services must observe local pandemic prevention requirements, confirming that vehicles indeed couldn’t be delivered in Shanghai. As such, the outbreak has not only affected the supply of spare parts for NIO, but also logistics and the transportation of vehicles.

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In fact, automobile supply chains in China have been affected by the recent COVID outbreak in Shanghai and other Chinese cities. Since late March, many automakers have announced their suspension of production.

Previously, a spokesperson for FAW-Volkswagen announced plans to close its factory in the northeastern Chinese city of Changchun until April 5. Tesla has shut down its Gigafactory Shanghai since March 28 due to stringent local pandemic prevention and control measures, and the date of resumption remains unknown.