Nio increases prices amid supply woes

Nio Inc. announced that it would hike prices as the latest coronavirus wave added to supply chain challenges.

On Sunday, the Chinese electric car company said it would raise the costs for its three SUVs, the ES8, ES6, and EC6. This move will add $1,572.00 to their base prices, effective May 10. Meanwhile, prices for the recently launched ET7 and ET5 sedans would remain the same.

Accordingly, raw material costs significantly surged this year, particularly those for batteries. Analysts mentioned no downward trend in sight for the near term.

Nio further noted that many suppliers could not provide parts with the recent COVID-19 outbreaks in Shanghai and Jiangsu province.

The firm also lagged behind rival start-ups Xpeng and Li Auto in terms of monthly deliveries. Nevertheless, despite supply chain challenges, all three companies delivered more cars in March than in February.

Moreover, Nio was the last of the three start-ups to hike prices. Last month, Xpeng elevated costs for its cars by $1,585.56 to $3,139.72. Then, Li Auto edged up prices by $1852.43.

These moves follow EV leader Tesla and other firms in the country that have levered up fees in the last several weeks.

Accordingly, the Chinese producer price index increased by 1.10% in March from a month earlier. Then, the metric gained 8.30% from a year-ago period—this year-on-year rise beat market’s expectations for a 7.90% increase.

Hong Kong-listed shares of Nio slumped 11.44%, or $2.39 points, to $18.47 per share after the announcement. Then, its New York-listed stock slashed 8.50% or 1.70 points to $18.30 per share in the pre-market.

Nio suspends EV production

On Saturday, Nio suspended production due to the disrupted operations at its suppliers. In line with this, the company will postpone deliveries of EVs to users.

Consequently, the firm reassured that it would work with the suppliers to strive for resumption.

The latest shutdown was the second time because of supply chain issues. Last year, it paused manufacturing in its Hefei plant for five working days due to a semiconductor shortfall.

Likewise, Tesla has also halted operations at its Shanghai plant since March 28. This move came after the city started a two-staged lockdown and eventually expanded.

Similarly, pandemic-related disruptions have hit traditional automakers as well. For instance, Volkswagen and its factories in Anting on the outskirts of Shanghai and Changchun remained closed through April 8.