Nio's production objectives have taken another hit as supply chain concerns caused the business to cease production at its Hefei, China, plant.
The company is also active in the FIA Formula E Championship, and albeit since selling to Lisheng Racing, Nio has stopped supporting the team.
Over the weekend, the manufacturer issued a delivery delay warning after suspending production due to COVID-19 restrictions that disrupted its supply chain.
On Saturday, Shanghai opened its largest makeshift hospital, which has 50,000 beds, as part of increased efforts to combat Omicron. On the same day, the city reported 1,015 confirmed and 22,609 asymptomatic domestically transmitted COVID-19 cases, a new high.
To stop the spread of the extremely contagious omicron strain, China has enforced severe lockdown measures in Shanghai and other cities, including Jilin province and Shanghai, where key auto parts and automotive plants are situated.
"The company's supplier partners in various places, including Jilin, Shanghai, and Jiangsu, have ceased production one after the other due to epidemic-related reasons and have yet to recover," the company stated.
Tesla has also halted production at its Shanghai plant since Mar. 28, according to Reuters, after the city initiated a two-stage lockdown that was later expanded citywide.
Volkswagen's joint venture plant in Changchun, the provincial capital of Jilin, has been closed since mid-March, and its joint venture plant in Shanghai with SAIC Motor has been closed since Apr. 1.
Nio's depository shares in the U.S. have dropped 37% this year. UBS analyst Paul Gong upgraded the stock last week but cut its price estimate from $42 to $32. As of Friday's end, Nio was trading at about $20 a share.
The main reason is that Nio's factories, test sites, and interactive centers are all located in Shanghai, according to Feng Shiming, an independent car analyst, who spoke to the Global Times on Saturday.
As the city moves quickly to stop the virus's spread, almost every link in Nio's supply chain has been impacted, according to Feng.
According to industry data, Nio delivered 25,768 vehicles in the first three months of this year, up 29 % year on year.
Nio is reportedly working with its supply chain partners to restore manufacturing and satisfy delivery deadlines as quickly as feasible. At the same time, the corporation stated that it will follow the COVID protocols.