Nio said Wednesday that rising cases of COVID-19 and lockdowns in the city of Hefei have caused it to pause production at two of its plants. The hiatuses have caused further disruptions to its business activities and a drop in its share prices.
Local reports suggest that production challenges had started to affect the automaker in mid-October, as measures to prevent the spread of the virus were put in place. At the time, various parts of the city were put under lockdown, including the district where Nio’s factories are located.
The automaker confirmed to Reuters that both of its Hefei plants have been temporarily shut down. It also admitted that the pauses would “have an impact on production and delivery schedules.” That, in turn, prompted share prices for the electric vehicle manufacturer to fall by as much as 7.5 percent.
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The company apologized for the delays in a statement that also disclosed its October delivery figures. It said that it had delivered 10,059 vehicles in October, down 7.5 percent from September, when it delivered 10,878 vehicles.
Nio was ranked as the 13th biggest EV seller in China between January and September, according to the China Passenger Car Association. As with other automakers, it has been battling COVID-related interruptions all year and was forced to suspend production in April, as a result of lockdown measures that affected a number of its suppliers.
The timing of this shut down may be particularly disruptive for Nio, as the market for electric vehicles in China cools. Although sales of EVs continue to rise, they aren’t rising as quickly as expected, and Tesla recently took the unusual measure of lowering prices for two of its top-selling vehicles and attempting to lower costs in the market. Analysts suggest that the market may be building towards pricing wars.