Nio said it has suspended production due to Covid-related restrictions in the past several weeks that have halted production at suppliers’ factories.
Long Wei | China Optical Group | Getty Images
BEIJING – Chinese electric car maker Nio said over the weekend that it is raising prices and suspending production as the latest wave of Covid added to supply chain challenges.
Shares of the Hong Kong-listed company were down about 9% in morning trading on Monday.
Nio announced on Sunday that it will raise the prices of its SUVs – the ES8, ES6 and EC6 – by 10,000 yuan ($1,572), starting May 10, and the prices of the recently launched ET7 and ET5 sedans will remain the same.
As part of the announcement, CEO William Lee said, according to a CNBC translation of the Chinese statement, that raw material prices, especially battery prices, have gone up “a lot” this year with no downside trend in sight in the near term.
“Originally [we] I think we can afford it, but now with this epidemic it is hard to bear. We have no alternative but to raise prices. Please understand that.”
The day before, on Saturday, Nio said it had suspended production due to Covid-related restrictions in the past several weeks that have halted production at suppliers’ factories.
“Due to the impact of COVID on Changchun and Hebei, the supply of some auto parts has been cut off since mid-March,” Li said. “I was able to count on stocks of auto parts until last week,” the production company said.
He added that as a result of the recent COVID-19 outbreak in Shanghai and Jiangsu Province, many suppliers cannot provide spare parts either.
The company began delivering its first sedan, the ET7, in late March. Deliveries of the second sedan, the ET5, are scheduled to begin in September.
Industry-wide price hikes
In terms of monthly delivery, Nio lags behind those of rival startups Xpeng – which sells its cars in a lower price range – and Li Auto – whose only model on the market comes with a fuel tank to charge the battery. The three companies delivered more cars in March than in February despite supply chain challenges.
Nio was the last of the three startups to raise prices.
In March, Xpeng raised the prices of its cars by 10,100 yuan to 20,000 yuan, while Li Auto raised prices by 11,800 yuan. The moves come on the heels of Tesla and other electric car companies in the country that have raised prices in the past several weeks.
The disruptions linked to Covid have hit traditional automakers as well.
Volkswagen said Thursday that its plants 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 increased 8.3% from a year ago, according to official figures released on Monday. The year-on-year increase exceeded expectations of a 7.9 percent increase forecast by a Reuters poll.
CNBC’s Arjun Kharpal contributed to this report.