Nio said it has suspended production due to Covid-related restrictions in the past few weeks, which have halted production at supplier factories.
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BEIJING — Chinese electric car company Nio said over the weekend it was raising prices and suspending production as the latest wave of Covid exacerbated problems in the supply chain.
The Hong Kong-listed company’s shares fell nearly 9% in early trading on Monday.
On Sunday, Nio announced that it would be raising the prices of three of its SUVs — the ES8, ES6 and EC6 — by 10,000 yuan ($1,572) starting May 10. Prices for the recently launched ET7 and ET5 sedans will remain the same.
Commodity prices, especially batteries, have risen “too much” this year and no downtrend is foreseen in the near term, CEO William Li said as part of the announcement, according to a translation of CNBC’s Chinese statement.
“Originally [we] thought we could bear it, but now, with this pandemic, it’s even harder,” he said. We have no other choice but to raise prices. Please show understanding.”
A day earlier, on Saturday, Nio said it had suspended production due to Covid-related restrictions over the past few weeks that have halted production at supplier factories.
“Due to the impact of Covid on Changchun and Hebei, shipments of some of our auto parts have been discontinued since mid-March,” Li said. The company’s production “managed to rely on stocks of auto parts until last week.”
He added that as a result of the recent Covid outbreaks in Shanghai and Jiangsu province, many suppliers are also unable to supply parts.
The company began deliveries of its first ET7 sedan at the end of March. Deliveries of the second sedan, the ET5, are due to begin in September.
Industry-wide price increases
In terms of monthly shipments, Nio lags behind competing startups. Xpeng, whose cars are sold in the lower price range, and Li Auto, whose only model on the market is equipped with a fuel tank to charge the battery. All three companies delivered more vehicles in March than in February despite supply chain problems.
Nio was the latest of three startups to raise prices.
In March, Xpeng raised the price of its cars by 10,100 yuan to 20,000 yuan, while Li Auto raised prices by 11,800 yuan. The moves follow Tesla and other electric car makers in the country to raise prices over the past few weeks.
Covid-related disruptions have also affected traditional automakers.
Volkswagen said on Thursday its factories in Anting on the outskirts of Shanghai and Changchun in northern Jilin province remained closed until Friday, April 8.
China’s producer price index rose 1.1% in March from the previous month and 8.3% from last year, according to official data released on Monday. The year-on-year increase beat expectations for a 7.9% growth forecast by a Reuters poll.
— Arjun Harpal of CNBC contributed to this report.