Electric vehicle (EV) manufacturers and Tesla rivals NIO reported an excellent fourth-quarter earlier this week, following the unveiling of its ET7 electric sedan earlier this year.
On Tuesday, CNBC reported that NIO had been hit by the current shortage in semiconductor chips, which has been affecting others within the EV market in recent weeks.
NIO says it plans to reduce its forecasted Q2 production capacity from 10,000 to just 7,500 vehicles per month, immediately following the company’s highest-demand quarter yet. The company plans to launch in Europe soon.
The EV maker saw vehicle sales hit $946.2 million USD in its fourth quarter for 2020, a 130% increase year-over-year, and up 44.7% compared to the previous quarter.
For the full year 2020, NIO saw vehicle sales increase 106.1% compared to the previous year, with margins at 12.7%, compared to -9.9% for the year prior.
Announcing Q4 total revenues of RMB6,641.1 M (US$1,017.8 M), Q4 deliveries of all NIO vehicles at 17,353 vehicles. Full year revenue RMB16,257.9 M (US$2,491.6 M). Full year deliveries of all NIO vehicles, 43,728 vehicles. Read more: https://t.co/0BJICbAYlS #AlwaysForward pic.twitter.com/szDlY7hn85
— NIO (@NIOGlobal) March 2, 2021
Other companies like NIO rivals Tesla have also had to slow down production after experiencing “parts supply issues,” most likely related to the current microchip shortage – which has been fueled by a growing demand for at-home electronics amid the ongoing Coronavirus pandemic.
The supply issue with microchips also happens alongside a skyrocketing demand for EV batteries, as the world begins a major transition to EV technology.
Even Ford CEO Jim Farley called for improvements to US EV battery cell manufacturing last week, explaining the world and the US wouldn’t have to face EV parts shortages if battery cells and other EV goods were made in America.
Regardless, while NIO has increased significantly in popularity throughout the last year and especially in recent months, they’re certainly not alone in having to scale back production amidst the modern semiconductor chip shortage.
Zachary Visconti is a writer with a knack for electric vehicles, technology, and climate change. Currently residing in Santa Rosa, California, Zach loves his partner, his cat, and a good cup of coffee.