NIO and Ford Idle Car Production Amid Chip Shortage
Chinese electric vehicle maker (NIO) – Get Report and U.S. automaker Ford (F) – Get Report are the latest automotive companies to idle production at some of their plants due to an ongoing shortage in semiconductor chips that has impacted global car and truck production.
NIO announced Friday it would halt production for five working days at its plant in Hefei, China. It also cut its first-quarter delivery forecast to around 19,500 vehicles, compared to the 20,000 to 20,500 vehicles it had previously expected.
That followed in Ford’s footsteps, with the automaker announcing Thursday it will idle production of its popular F-150 pickup truck at a plant in Michigan through Sunday due to the chip shortage. The carmaker had cautioned about the chip shortage affecting production following a bond sale earlier this month.
NIO and Ford are among several automakers that have been forced to halt manufacturing in recent months due to a lack of chips that are crucial for modern-day cars to run.
Honda (HMC) – Get Report and General Motors (GM) – Get Report both announced this week they would continue production suspension at plants in North America for the coming weeks, citing the chip shortage as one of several reasons.
When Will NIO Stock Be a Buy?
Swedish truck maker Volvo said this week the chip shortage would have a “substantial” impact on its second-quarter earnings, and announced it would implement stop days across its truck manufacturing sites globally beginning in April.
Tesla (TSLA) – Get Report also has been impacted by the chip shortage, which forced it to idle production of its Model 3 sedan last month.
A confluence of factors including factory shutdowns, booming demand for laptops and tablets, and sanctions against Chinese tech companies have caused a global shortage of chips that has rattled the electronics sector since December.
Originally concentrated in the auto industry, the shortage has widened to affect a range of consumer electronics, including smartphones.
Jim Cramer has singled out NXP Semiconductors (NXPI) – Get Report as the “company causing the biggest problem here.”
Curious about what Jim Cramer and his team at Action Alerts PLUS are watching in the markets? Watch Cramer’s exclusive members-only Daily Rundown show on Action Alerts PLUS following TheStreet Live.
