Chinese electric car company Nio risen rates, suspends production

BEIJING — Chinese electric car company Nio said over the weekend it’s increasing in rates and dangling production as the last Covid wave added to supply chain challenges.

The company’s Hong Kong-listed shares fall around 9% on Monday morning dealing.

Nio announced on Sunday the prices would go high for its three SUVs — the ES8, ES6, and EC6 — by 10,000 yuan ($1,572), successful on May 10. Prices for the recently launched ET7 and ET5 sedans would continue at the same prices.

Raw material costs, particularly those for electric car batteries, have raised “too high” this year with no sinking trend in sight for the near term, CEO William Li said as part of the statement, according to CNBC translation of the Chinese statement.

“Originally [we] thought we could bear it, but now with this pandemic, it’s even harder to bear,” he said. “We have no alternative but to raise prices. Please be understanding.”

One day before, on Saturday, Nio said it suspended production due to a Covid-related reduction in the last several weeks that halted production at suppliers’ factories.

“Due to the impact of Covid on Changchun and Hebei, the supply of some of our auto parts has been cut off since mid-March,” Li said. The company’s production “managed to rely on auto parts inventory until last week.”

He added that as a result of the previous Covid eruption in Shanghai and Jiangsu State, many suppliers can’t supply parts either.

The company began shipment of its first sedan, the ET7, at end of March. A second sedan, the ET5, is the place to start deliveries in September.

Industry-wide price rise

In terms of monthly supplies, Nio has fallen behind those of rival start-ups Xpeng — whose cars sell in a cheap price range — and Li Auto — who’s at best model on the market launched with a fuel tank for charging the battery. All three companies supplied more cars in March than in February even with supply chain challenges.

Nio was the last of the three start-ups to increase prices.

In March, Xpeng raised prices for its cars by 10,100 yuan to 20,000 yuan, while Li Auto uplifted prices by 11,800 yuan. The moves follow Tesla and other electric car companies in the countries that have uplifted prices in recent several weeks.

Covid-related disruptions have hit traditional automakers as well.

Volkswagen said Thursday its factories in Anting on the edges of Shanghai and Changchun in the northern province of Jilin remained closed on Friday, April 8.

China’s producer price index rose by 1.1% in March from a month earlier and got to 8.3% from a year ago, according to official rates launched on Monday. The year-on-year increments topped expectations for a 7.9% increase forecast by a Reuters poll.