NIO CEO: Chinese Auto Market Should Brighten Up In March Or April

China has been struggling a bit in recent months with COVID-19 lockdowns, then COVID-19 outbreaks, and of course with a variety of economic slowdowns and supply chain disruptions due to both of those. Pick your automaker and you can see signs of the struggles in lower than expected sales, price cuts, etc. (Just don’t pick BYD. Though, maybe even BYD is pushing more cars abroad as a result of these issues.)

In the EV world, these problems have hurt Tesla, XPeng, and NIO, among others. But NIO’s founder, chairman, and CEO is now saying that things should start looking up by the spring. “I am very confident that in the near future, China supply chain and the auto industry will return to normal,” NIO leader William Li said. “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,” he added. But the question is: is this a trustworthy projection, or is it Li grasping at a bit of hope and trying to inject some more consumerism into the population? We’ll find out in a few months.

NIO’s growth year-over-year looks quite good. But the issue is that it’s not as good as had been projected and expected. It had just over 40,000 sales (deliveries) in the 4th quarter, 60% more than the 4th quarter of 2021 and a record quarterly total for the company. However, NIO had guided for 43,000–48,000 4th quarter sales as late as its 3rd quarter earnings call in November. Clearly, something went a bit wrong, and NIO has blamed COVID-19 and supply chain issues.

Competitor XPeng had a much tougher time in the 4th quarter, though, seeing a large year-over-year decline in the quarter. A new model (the G9*) should provide an influx of sales, but there’s no doubt XPeng should be seeing sales growth at this point in its evolution, not a decline. Perhaps a chunk of the blame is the COVID-19 crisis and supply chain woes. If the automaker can get some relief in March or April, that would do wonders for the company.

All of that hope on the line, though, there’s another issue: China has cut some EV subsidies in 2023. That alone will make the first half of 2023 a tough first half of the year. With that in mind, the Chinese EV market may not really start to recover or grow fast again until May or June 2023. We shall see.

*Also see:

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