Chip Shortage Is Becoming A Serious Problem For EV Maker NIO

China’s electric vehicle maker NIO revised down on Wednesday its guidance for vehicle production this quarter, citing uncertainty over semiconductor supply and becoming the latest automaker to suffer supply chain issues.

NIO now guides for production of 22,500 to 23,500 vehicles in the third quarter of 2021, revised from the previous outlook of 23,000 to 25,000 vehicles “in light of the continued uncertainty and volatility of semiconductor supply,” the Chinese EV maker said in its delivery update for August.

NIO’s deliveries last month jumped by 48.3 percent year over year to 5,880 vehicles, it said.

But it also noted: “While the Company’s new order reached an all-time high in August driven by the increasing demand, the vehicle production, especially the manufacturing of the ES6 and EC6, was materially disrupted by supply chain constraints resulting from the COVID-19 pandemic in certain areas in China and Malaysia.”

NIO is the latest victim of the global semiconductor shortage, which has worsened in recent weeks due to the spike in COVID outbreaks in major chip-manufacturing countries in Asia.

Two of the biggest automakers in the world, Toyota and Volkswagen, said in August that they would slash vehicle production in the near term because of the semiconductor supply crunch. The news comes as Covid-19 outbreaks in Asia have caused chip production and operations at commercial ports to slow dramatically, stunting production in the auto industry amidst recovering demand.

U.S. automakers are also impacted by the chip shortage. In early August, General Motors idled for a week its three assembly plants in North America manufacturing full-size pickup trucks.

“The recent scheduling adjustments have been driven by temporary parts shortages caused by semiconductor supply constraints from international markets experiencing COVID-19-related restrictions,” GM said.

Ford was also forced to suspend for one week in August its assembly plant in Kansas City, which makes the best-selling F-150 pickup truck, citing shortages in semiconductor supply due to the spike in COVID cases in Malaysia.

By Tsvetana Paraskova for Oilprice.com

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