Chinese electric car startup Nio said Friday it expects a global chip shortage will drag down vehicle deliveries in the second quarter. A fire in March at a Japanese chip factory owned by Renesas has exacerbated an existing shortfall in semiconductors that has forced major automakers to cut production.

Without naming the factory, Nios Chairman William Li said during an earnings conference call he expects the negative impact of the fire to hit the auto supply chain in midMay. The industry generally expects the shortage will reach a turning point in the third quarter, Li said.

For now, Nio had to halt production for five working days around the end of March, which will affect vehicle deliveries for April, Li said. The startup forecast secondquarter deliveries of between 21,000 and 22,000 vehicles, for growth of 5 to 10 from the first three months of the year. Thats a significant quarteronquarter slowdown from growth of 16 in the first quarter, and 42 in the fourth quarter.

Despite challenges from the supply chain and technological development, Li said the companys first sedan, the ET7, remains on track for its scheduled launch to customers in the first quarter of 2022.

Nio delivered 20,060 vehicles in the first quarter, the most among its U.S.listed electric car startup peers in China. On Friday, Nio said vehicle sales for the period were 7.41 billion yuan 1.13 billion. However, Elon Musks Tesla has been steadily ramping up production in China, which brought in sales of…