Long Wei | Visual China Group | Getty Images BEIJING – Chinese electric car maker Nio said at the weekend that it was raising prices and suspending production as the latest Covid wave was added to supply chain challenges. Shares of the Hong Kong-based company fell nearly 9% in Monday morning trading. Nio announced Sunday that it will increase prices for its three SUVs – the ES8, ES6 and EC6 – by 10,000 yuan ($ 1,572), effective May 10. The prices for the recently released ET7 and ET5 sedans will remain the same. Raw material prices, especially for batteries, have risen “too much” this year with no sign of a downward trend in the near future, CEO William Li said as part of the announcement, according to a CNBC translation of the Chinese statement. “Initially [we] “We thought we could handle it, but now with this pandemic it is even more difficult,” he said. “We have no choice but to raise prices. Please understand. “ A day earlier on Saturday, Nio said it had suspended production due to Covid-related restrictions in recent weeks that cut production at suppliers’ factories. “Because of Covid’s impact on Changchun and Hebei, some of our spare parts have been out of stock since mid-March,” Li said. The company’s production “managed to build on the stock of car parts until last week”. He added that as a result of the recent Covid outbreaks in Shanghai and Jiangsu Province, many suppliers are also unable to supply spare parts. The company began delivering its first sedan, the ET7, in late March. A second sedan, the ET5, is set to launch in September.
Price increases throughout the industry
In terms of monthly deliveries, the Nio lags behind those of competing Xpeng start-ups – whose cars are sold at a lower price range – and Li Auto – whose only model on the market has a fuel tank for charging the battery. All three companies delivered more cars in March than February despite supply chain challenges. Nio was the last of three startups to raise prices. In March, Xpeng increased the price of its cars by 10,100 yuan to 20,000 yuan, while Li Auto increased the price by 11,800 yuan. The moves follow Tesla and other electric car companies in the country that have raised prices over the past several weeks.
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Covid-related vacations have also hit the traditional car industry. Volkswagen announced on Thursday that its plants in Anting on the outskirts of Shanghai and Changchun in the northern province of Jilin remained closed until Friday, April 8. China’s producer price index rose 1.1% in March from a month earlier and rose 8.3% from a year earlier, according to official data released on Monday. The year-over-year increase exceeded expectations for a 7.9% increase forecast by a Reuters poll. – CNBC’s Arjun Kharpal contributed to this report.
