SHANGHAI, Dec 28 (SMM) - On December 27, NIO (NIO. US; 09866. HK) announced that due to the outbreak of the pandemic in major Chinese cities, the company faced challenges in production and delivery, which coupled with certain supply chain restrictions and disturbances on end-users' participation in the delivery and registration process, the car delivery forecast in the fourth quarter of 2022 was lowered to 38,500-39,500 units.
SMM survey showed that NIO had previously expected to deliver 43,000-48,000 units of vehicles in the fourth quarter. According to the latest delivery guidelines, NIO's delivery limit for the fourth quarter of 2022 will be lowered by nearly 10,000 units. In October 2022, NIO delivered a total of 10,000 units of new cars, and in November it delivered 14,200 units. If NIO intends to meet the latest delivery guidelines, it should deliver 14,300-15,300 units of vehicles in December.
NIO announced that due to the impact of COVID-19, the company has been facing challenges in delivery and production as well as certain supply chain restrictions. "While our teams strive to maintain continuous operations in all aspects, we are unable to operate to our full capacity, especially with the disruptions to delivery and registration processes involving users.”
In fact, since the second half of 2022, production capacity issues have continued to curb NIO's delivery volume from climbing. In October, NIO's two factories in Hefei city once suspended their production. Besides, NIO suffered an insufficient supply of sub-frames. At the same time, the new model ET5 uses raw materials from a new electronic differential lock (EDS) factory which was ramping up the capacity, thus NIO's capacity was reduced by about 2,000-3,000 units. Moreover, NIO's factories stopped the production for about one week because of COVID-19. Li Bin, the CEO of NIO, was cautious about the continuous disturbances on the supply side in recent years. He predicts that the supply chain and vehicle production chain can support NIO's production target for 2023. However, the car production will be limited by raw material supply, for instance, the December delivery volume will be restricted by the power semiconductor supply. NIO's delivery volume in the fourth quarter has been reduced by insufficient production capacity. SMM believes that at the end of the year when most car makers are ramping up their NEV sales, the raw material supply problems and the consumer demand issues aroused by the spread of COVID-19 may be a common challenge for the NEV manufacturers.
In 2023, NIO will launch three new car models. Li Bin once said that the NEV market in 2023 will face a lot of challenges in the first half of 2023. Besides, the cancellation of the NEV subsidy has released potential consumption in advance. NIO presumes that in the second quarter of 2023 or May 2023, the raw material supply and consumer demand will basically recover from COVID-19 outbreaks.
