Demand will continue, and the problem is supply chains

BEIJING – Chief Executive Officer William Lee told CNBC that the biggest challenge facing Nio right now is making sure supply chains are stable.

The Chinese electric car maker had to charge customers more fees due to higher raw material prices.

When Covid controls in April prevented Nio’s from getting parts from suppliers, the company was forced to temporarily suspend production. But the company said it was able to resume some production after a few days.

However, as of Thursday, Li still described the overall state of China’s auto production as being in the process of recovery while Shanghai and other parts of the country remain under the control of Covid.

On the sales front, Lee said he expects consumer demand for electric cars to continue — even if the Chinese government cuts subsidies or other policy support for the sector.

Chinese electric car maker Nio delivered more than 5,000 vehicles in April despite Covid restrictions in some parts of China, albeit a sharp drop from nearly 10,000 vehicles in March.

Future Publishing | Future Publishing | Getty Images

Nio delivered more than 5,000 vehicles in April despite Covid restrictions, albeit a sharp drop from nearly 10,000 vehicles delivered in March.

Passenger car sales fell 35.5% year-on-year in April, but new energy vehicles — which include battery electric vehicles — saw sales rise 78.4%, according to the China Passenger Car Association.

Southeast Asian plans for New

Lee, who is also founder and chairman of Nio, spoke in an interview with CNBC’s Emily Tan prior to the company’s secondary listing in Singapore.

On Friday, Nio made a secondary listing on the Singapore Stock Exchange via filing – which differs from an initial public offering in that no new capital was raised and paperwork required.

Instead, the listing primarily allows investors to trade the company’s shares on an exchange other than the main trading venue.

In early March, Nio also made a secondary listing in Hong Kong by applying. The company’s first and primary place of listing is still the New York Stock Exchange.

The auto executive did not explain why the company chose Singapore as its third place to list, but said Nio could reach more investors in this way.

But Lee said Nio plans to export cars to Southeast Asia and open an R&D center in Singapore in the near future for artificial intelligence and autonomous driving. He did not give specific dates.

So far, the company has focused much of its overseas expansion on Europe, particularly in Norway.

The start-up’s primary trading venue remains the New York Stock Exchange, where the company held its initial public offering in 2018.

US-listed Nio shares are up about 150% since that initial public offering — a volatile three-plus years that included several quarterly declines and a full year in 2020 that saw an increase of more than 1,100%.

Chinese electric car maker Nio delivered more than 5,000 vehicles in April despite Covid restrictions in some parts of China, albeit a sharp drop from nearly 10,000 vehicles in March.

Future Publishing | Future Publishing | Getty Images

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