Sam is a professional trader and the lead stock market news writer at AskTraders. After starting his career in the forex market, Sam now focuses on gold and stocks with a preference for fundamental and macroeconomic analysis.
Shares of Chinese electric vehicle maker NIO are trading lower on Friday after the company warned that the ongoing semiconductor chip shortage will impact production in Q2.
The semiconductor chip shortage came about after Covid-19 enforced lockdowns saw demand for electronics surge.
Several car manufacturing facilities have had to slow production and close in recent months, with NIO stating that the supply chain is facing significant challenges due to the shortage.
NIO had to halt production for five working days at the end of March, which, the company said, will impact April deliveries.
The company is forecasting deliveries between 21,000 and 22,000 in the second quarter.
In Q1, NIO delivered 20,060 vehicles, a 422.7% increase from Q1 2020 and a 15.6% rise month over month.
“NIO started the year of 2021 with a new quarterly delivery record of 20,060 vehicles in the first quarter, representing a strong growth of 422.7% year over year,” said William Bin Li, founder, chairman and CEO of NIO.
“The overall demand for our products continues to be quite strong, but the supply chain is still facing significant challenges due to the semiconductor shortage. In light of the strong momentum under a volatile macro environment, we expect to deliver 21,000 to 22,000 vehicles in the second quarter of 2021,” added Li.
In its earnings report, NIO reported a smaller than expected loss of $0.04, with total revenue coming in at $1.22 billion.
Vehicle margin rose to 21.2% compared to -7.4% in Q1 2020, which was put down to customers purchasing NIO's drive assistance software and upgrading battery subscription plans.
NIO's stock price is down 3.98% premarket at $37.44. For the year to date, it is down 20%.
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