Nio electric car sales hit here as it clawed to handle battery recall – TechCrunch
Nine delivered just 837 electric cars in July, a decline of almost 38% from the previous month largely caused by a voluntary recall of the high-performance ES8 SUV.
The Chinese car startup issued a voluntary recall in June of nearly 5,000 ES8 SUVs following a series of battery fires in China and a subsequent investigation revealed a vulnerability in designing the battery pack which can cause a short circuit. The recall affected a quarter of the ES8 vehicles sold since they were sold in June 201[ads1]8.
Nine were able to complete the recall for 4,803 ES8s by prioritizing battery production capacity for this effort, which significantly affected production and delivery results, NIO founder, chairman and chief executive William Li said in a statement on Monday.
"On the positive side, we completed the ES8 battery recall in about half the time compared to our original timeline," Li said, adding that customer confidence will return. "Looking ahead, with the allocation of battery capacity back to normal, we will accelerate deliveries and compensate for the loss of delivery affected by the recall."
Nine expects August to be a "much stronger month" with a goal of delivering between 2,000 and 2,500 cars, according to Li. That's a significant jump from what Nio has managed to achieve in recent months, even without the extra battery recall problem.
Nine delivered 1,340 cars in June, 1,089 in May and 1,124 in April. As of July 31, 2019, total deliveries of the company's ES8 and ES6 reached 19,727 vehicles, of which 8,379 vehicles were delivered in 2019.
The deliveries of the ES8 initially exceeded expectations, but they have since waned in 2019. Now, Nine will have to to double deliveries in August to reach the target.
Other factors, and those that may prove to be more chronic, also affected delivery rates in July. Li noted that expected reductions in EV subsidies and macroeconomic conditions in China, such as a decline in passenger car sales and US-China trade conflict.
The economic picture in China has already caused Nine to cut the labor force by 4.5%, change car production plans and reduce R&D spending. Nine reported a loss of $ 390.9 million in May in the first quarter from a decline in sales primarily driven by the EV grant reduction in China and macroeconomic trends in the country that have been exacerbated by the US-China trade war, Li said time.
