By Dhirendra Tripathi
Investing.com – Shares of Chinese electric vehicle maker Nio (NYSE:NIO) tumbled 5% early Friday after the company said it would halt production of its electric vehicles at one one of its plants.
The company cited the worldwide shortage of semiconductors for its decision. The shares also fell 8% in premarket trading.
Chips have been in short supply for some months but that gap has been exacerbated as economies recover along with more demand for work-from-home accessories.
Nio’s JAC-NIO plant in China’s central provincial capital of Hefei will halt operations for five working days starting March 29, Reuters quoted the company as saying Friday.
“The company expects to deliver approximately 19,500 vehicles in the first quarter, adjusted from previously released outlook of 20,000 to 20,500 vehicles,” Nio said in its release, according to Reuters.
The pandemic caused a surge in demand for chips needed for smartphones, TVs, computers and various other consumer items as people attempted to adjust to a work-from-home lifestyle and also get more productive. EV makers, whose appetite for the chips has also only gotten bigger on the back of surging demand for the greener vehicles, have taken the brunt of the shortage.