"I am very confident that in the near future, China supply chain and the auto industry will return to normal," Li said.
China saw a wave of infection after it essentially abandoned the zero-Covid policy in late December, which has hit the auto industry. In the eyes of the man at the helm of Nio (NYSE: NIO), the impact is expected to fade within a few months.
"My preliminary estimate, with the factor of the upcoming Lunar New Year, is I believe the overall supply chain should be stabilized by next March or April," said William Li, founder, chairman and CEO of Nio, according to a video tweeted by Bloomberg today.
The video does not show the date when Li said those words, though it appears to be shortly after Nio Day 2022, which was held on December 24.
"With the process of China's reopening, it's inevitable to be impacted in the region where we are based. And also our supply chain partners," Li said.
But the good news is that the impact will be gone soon, he said, adding, "I am very confident that in the near future, China supply chain and the auto industry will return to normal."
The impact of China's Covid restrictions will be gone soon, Chinese EV maker Nio CEO William Li says, adding the auto industry will return to normal in the near future.
"I believe the overall supply chain should be stabilized by next March or April." https://t.co/UlyRZBJ8cd pic.twitter.com/x4DNlzRGBu
— Bloomberg (@business) January 3, 2023
Nio delivered 15,815 vehicles in December, which, despite being a record high, is still disappointing, considering the company's previous higher guidance.
The company guided for 43,000 to 48,000 deliveries for the fourth quarter when it reported its third-quarter earnings in November, meaning it would have to deliver at least 18,763 units in December to reach the lower end of the guidance range.
On December 27, Nio lowered the delivery guidance to 38,500 to 39,500 vehicles, blaming the Covid outbreak for the delivery and production challenges.
Nio has been facing delivery and production challenges in December, coupled with certain supply chain constraints caused by an outbreak of a variant of the Omicron coronavirus in a major Chinese city, it said in a statement last week.
The company launched the EC7 as well as the new ES8 at Nio Day 2022 on December 24, with deliveries set to begin in May and June 2023, respectively.
The next day, Li said in a group interview that the Chinese new energy vehicle (NEV) market will be very challenging in the first half of 2023 as the purchase subsidy is withdrawn.
In addition, as China recovers from the Covid outbreak, it will take some time for both the supply chain and consumer confidence to recover, he said at the time.
China's NEV market will generally have a period of pressure in the first half of 2023, but if viewed optimistically, the market can gradually recover by the second quarter or May, he said.
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