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Why Shares of Chinese electrical car manufacturer Nio (NIO 0.44%) were tumbling today?

Shares of Chinese electrical car makerĀ nio stock (NIO 0.44%) were tumbling today on seemingly no company-specific news. Instead, investors may be reacting to news from the other day that some parts of China were experiencing a rise in COVID-19 instances.

Extra lockdowns in the country might once more slow the company‘s lorry manufacturing as it has in the recent past. Therefore, investors pressed the electrical vehicle (EV) stock down 6.6% since 10:59 a.m. ET.

CNBC reported the other day that the variety of cities in China that have carried out COVID-related limitations has actually doubled. Among the areas is a district called Anhui, where Nio has a factory.

Nio reported its second-quarter automobile distributions late recently, with quarterly lorry distributions up 14% year over year and also June distribution increasing 60%. Part of that development was assisted in part since pandemic restrictions were relieved throughout that duration.

China has an extremely strict “zero-COVID” plan that restricts movement by residents and has actually led to manufacturing facilities for Nio, and various other EV manufacturers, halting lorry production.

Nio financiers have actually gotten on a wild trip recently as they process inflation data, increasing anxieties of a global recession, and rising coronavirus cases in China. And also with the most recent information that some parts of China are experiencing new lockdowns, it’s likely that the volatility Nio’s stock has experienced recently isn’t completed right now.

Nio investors must maintain a close eye on any type of new developments concerning any kind of temporary factory shutdowns or if there’s any type of indication from the Chinese federal government that it’s downsizing on constraints.

Should you spend $1,000 in Nio Inc. today?
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