Nio Inc (蔚來汽車) founder and chief executive officer William Li (李斌) said the Chinese electric vehicle (EV) maker could face a challenging first half of next year as a cut in government subsidies and the broader economic slowdown erode local demand in the world’s largest new-energy vehicle market.
Customers are likely to try to place orders before the end of the year, when the national subsidies for electric vehicles are expected to be phased out, Li said at a briefing after the company’s launch of its latest models at a weekend event in Hefei, China.
“It will also take time for both the supply chain and consumer confidence to recover from the pandemic,” Li said, adding that he expects a full recovery in May or June.
Photo: REUTERS
The Shanghai-based automaker’s production has been upended by the effects of COVID-19. China’s initial strict adherence to its “zero COVID-19” policy handicapped production, logistics and delivery, before the government’s reversal in policy led to a sharp increase in infections, forcing Nio to miss its annual delivery target of 150,000 units.
The company needs “to actively strengthen our capabilities in demand forecast and rapid response” under the volatile and uncertain situation, Li said on Sunday.
Nio aims to set up a system with suppliers to disclose inventory conditions for semiconductors and raw materials, as well as staffing, equipment investment and production capacity, he said.
If there are changes in supply or demand, each player would be prepared to respond rapidly, Li said.
Nio has taken precautions by storing more components, increasing orders from the original chipmakers and exchanging semiconductors with other automakers, Li said.
He called on vehicle makers and suppliers to “reasonably place orders for chips” because of possible panic buying.
COVID-19 outbreaks have the potential to cripple production and disrupt employee rosters, threatening the global supply of everything from vehicles and golf carts to kitchen appliances.
Nio has in the past two years collaborated with component-making partners to support each other with workers when necessary, Li said.
Deliveries of new-energy vehicles — pure electric and hybrid vehicles — to dealerships in China are expected to reach 6.5 million by the end of the year, and could hit 8.4 million next year, the China Passenger Car Association said at a briefing earlier this month.
However, the year-on-year growth rate is slowing, and overall profit for the industry, excluding Tesla Inc, could be negative, given the huge spike in costs of raw materials for EV batteries, Li said.
“There was in fact no actual shortage of EV batteries, at least not as severe as the chip shortage,” he said, adding that “it is obvious the upstream suppliers are making great profit, while carmakers like us are having a hard time.”
Part of the reason for this is the lack of transparency in lithium pricing, Li said.
Nio, which targets premium buyers for its vehicles, plans to roll out its first mass market model in 2024, he said, adding that the company is also focusing on developing and producing its own batteries and chips, he said.
“You have to take the vertical integration of key components if you want to enter the mass market and make profit,” Li said, “otherwise it would not be possible.”
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
Taichung reported the steepest fall in completed home prices among the six special municipalities in the first quarter of this year, data compiled by Taiwan Realty Co (台灣房屋) showed yesterday. From January through last month, the average transaction price for completed homes in Taichung fell 8 percent from a year earlier to NT$299,000 (US$9,483) per ping (3.3m²), said Taiwan Realty, which compiled the data based on the government’s price registration platform. The decline could be attributed to many home buyers choosing relatively affordable used homes to live in themselves, instead of newly built homes in the city’s prime property market, Taiwan Realty
JET JUICE: The war on Iran’s secondary effects have seen fuel prices skyrocket, knocking flight schedules down to earth in return as airlines struggle with costs Airline passengers should brace for more irritation in the next few months as carriers worldwide cancel flights and ground planes to cope with stratospheric increases in jet-fuel prices. Dutch flag carrier KLM is the latest company to cut its schedule, saying on Thursday that it would scrap 80 return flights at Amsterdam’s Schiphol Airport in the coming month. That puts it in the same league as United Airlines Holdings Inc, Deutsche Lufthansa AG and Cathay Pacific Airways Ltd, which have all pruned itineraries to mitigate costs. Global capacity for next month has been reduced by about 3 percentage points, with all
Taiwan is attracting a growing number of foreign jobseekers as companies increasingly recruit overseas talent to ease labor shortages and expand global reach, recruitment platform 104 Job Bank (104人力銀行) said yesterday. More than 40,000 foreign nationals searched for jobs in Taiwan through the platform last year, a 28 percent increase from a year earlier, the company said. Malaysians accounted for the largest share of overseas jobseekers at 12.2 percent, followed by Indonesians at 11.9 percent and Vietnamese at 10.8 percent. Indonesian applicants surged more than 50 percent year-on-year, while Vietnamese jobseekers rose by more than 30 percent. Applicants from the
RSS