Yahoo Finance Tesla, NIO hit by COVID restrictions in China
The COVID-19 shutdowns across China are hitting electric-vehicle makers like Tesla (TSLA) and NIO (NIO) where it hurts — on the factory floor and potentially their bottom lines.
According to new data from the China Association of Automobile Manufacturers (CAAM), overall vehicle sales for March in China slipped 11.7% from a year ago to 2.23 million vehicles, the first decline in three months.
And it does not appear the situation is getting any better. "The recent pandemic situation has been quite severe, and so the figures in March were not too good, and we currently do not see much improvement in April," said Chen Shihua, CAAM’s deputy secretary general.
As for Tesla, from a production standpoint its Shanghai plant produced 55,462 cars in the month of March, when it was forced to suspend production for two days in the middle of the month. This was only 154 more units than Tesla produced in February; and by comparison, Tesla made 68,117 cars in January. Note Tesla’s Shanghai plant has been closed since March 28 due to COVID-19 restrictions.
From a delivery standpoint, Tesla shipped a total of 65,814 cars from its Shanghai plant in March, with only 60 vehicles exported. Strong local demand sucked up any inventory that was meant for export, though it is likely more vehicles would have been exported if the Shanghai factory was in operation.
Chinese EV-maker NIO is also feeling the COVID pinch. Over the weekend, NIO announced it would be shutting down production at its plant in China and raising prices for its vehicles.
"Since March, due to reasons to do with the epidemic, the company's supplier partners in several places including Jilin, Shanghai and Jiangsu suspended production one after the other and have yet to recover… Due to the impact of this NIO has had to halt car production," the company said on its mobile app, according to a report from Reuters.
Conversely, Chinese EV-news website CnEVPost reports starting prices for all of NIO’s SUVs will rise by 10,000 yuan ($1,570), though prices for the ET7 and ET5 sedans will remain unchanged.
"The price increases are because there is no choice and please understand," NIO Chairman and Founder William Li said in a statement, per CnEVPost.
Volkswagen and Toyota have also had to shut down production at their joint ventures in China, due to COVID restrictions in areas like Shanghai and Changchun, respectively.
With concerns rising over production in the EV-hungry Chinese market, both shares of Tesla and NIO are trading lower midday.
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Pras Subramanian is the senior autos reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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