NIO Limited (NYSE: NIO) has disclosed Friday that it has decided to halt vehicle production operation for the short period of time in the JAC-NIO manufacturing plant in Hefei. The decision has been taken due to the global shortage of chips.
The production operations were suspended for five days starting from March 29, 2021, due to the shortage of chips. NIO has disclosed that the whole supply constraint of semiconductors has affected the production volume of the firm in March 2021. NIO anticipates providing nearly 19,500 vehicles in the first quarter of 2021, tweaked from the earlier declared stance of 20,000 to 20,500 vehicles.
Shares of NIO soared 2.65% at $37.94 during the trading session of Thursday. After the announcement of the suspension, the shares of firm went down -1.00% during the pre-market trading session of Friday. NIO has a total market capitalization of $57.31 billion at the time of writing.
NIO has joined other vehicle manufacturers as the world is facing a shortage of chips due to increasing demands. General Motors (NYSE: GM) and Honda Motor have also declared that they would proceed with the plan to halt the production at plants in North America for the coming weeks. The firms have disclosed that the reason behind this suspension is the shortage of chips.