China’s electric car startup Nio will shut down for five days due to the global semiconductor shortage, the company announced on Friday in a press release. The five day shutdown will start on Monday and will mean the company produces slightly fewer cars this year than it had planned.
“The overall supply constraint of semiconductors has impacted the Company’s production volume in March 2021,” Nio said in a statement. “The Company expects to deliver approximately 19,500 vehicles in the first quarter of 2021, adjusted from previously released outlook of 20,000 to 20,500 vehicles.”
Nio makes several different models, including a seven-seater electric SUV, a two-seater sports car, and has plans to produce a minivan in 2022. But Nio isn’t the only car company around the world feeling the pinch from the computer chip shortage. CNBC estimates the global auto industry as a whole will lose as much as $60 billion from the lack of chips this year as it ripples around the world.
Nio, headquartered in Shanghai, was founded in 2014 and has received billions from Chinese investors looking to capitalize on the electric vehicle market. The Chinese government has also invested heavily in electric vehicles by heavily subsidizing the industry. It’s unclear how the global chip shortage will impact Nio’s plans to expand into western countries in the coming years.
China is the largest EV market in the world, though Norway outpaces China in EV sales as a percentage of the country’s total car market. An estimated 1.3 million electric vehicles were sold in China last year, representing roughly 40% of all EVs sold around the world, according to research by Canalys. The U.S. market represented just 2.4% of all EV sales in 2020.