Business News: Due to an ongoing global shortage in semiconductor chips, multiple automobile manufacturers have reported halts in production of automobiles, Now, the Chinese EV automobile maker and Tesla’s rival Nio has also announced its halt in production for the coming weeks. Earlier Honda Motor, Ford Motors, GM and Volkswagen reported halts.
Automobiles related research firm named; Auto Forecast Solutions estimates that there will be at least 1,30,000 units in loss due to the halts in production. North America leads the unit losses with 74,000 units and Europe by 35,000. The chip shortage and production halts come at a time when demand for automobiles is in redemption following the pandemic.
Experts say that the shortage is mainly due to the high demand of semiconductor chips in consumer electronics industry as more and more people are buying gadgets to work with during the pandemic. Another reason is the Western sanction on Chinese tech companies that make semiconductor chips.
Nio announced its production facilities will be shut for 5 days and 1,000 units will be lost. Following the halt, Nio’s stocks went down by 8%. Nio makes sports type cars, ES8 and ES6 EV vehicles. Its rival Xpeng also announced production cuts that cut down units to 19,500 from 20,500. Ford projects a loss in profits by nearly $2.5 billion and GM projects loss by $2 billion at least.
Ford’s production facility at Michigan will remain idle for the coming weeks and so does GM’s Honda’s production at North America to remain closed for the upcoming few weeks. Similarly, Sweden’s Volvo AB also announced halts in production and losses in profits in second-quarter.