Why NIO Stock Is Down Today

Are investors rising timorous about sky-high stock prices?

John Rosevear

This text represents the idea of the writer, who can even disagree with the “first payment” recommendation living of a Motley Fool premium advisory provider. We’re motley! Questioning an investing thesis — even one among our personal — helps us all assume seriously about investing and variety decisions that merit us turn out to be smarter, happier, and richer.


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What occurred

Shares of Chinese language electrical vehicle maker NIO (NYSE:NIO) had been buying and selling lower on Monday. There modified into no obtrusive recordsdata riding shares lower, nonetheless it could probably also had been caught in a sell-off that affected varied no longer too prolonged ago hot investments including Tesla and Bitcoin. 

As of 1: 15 p.m. EST, NIO’s American depositary shares had been down about 5.5% from Friday’s closing designate.

So what

While there are correct causes to be bullish on NIO’s prolonged-term potentialities, or no longer it is onerous to argue with the notion that the stock has turn out to be costly. On the least, here’s an organization that sold correct 43,000 autos in 2020 — and or no longer it is still carrying a market cap almost twice that of Ford Motor Firm.

Traders who had been spherical The Motley Fool for a while know that some stocks that appear costly now usually be taught about low-designate looking back. That can even flip out to be correct of NIO. But I guess or no longer it is exclusively possible that on the present time’s downward motion is said to declines in Tesla, Bitcoin, and same resources in the sense that hundreds issues are taking a be taught about costly — and some investors is likely to be responding by transferring to lower general portfolio possibility.

That can even successfully encompass taking some NIO profits, and that is also why the stock is down on the present time. 

Now what

There modified into some shrimp recordsdata on NIO on Monday, nonetheless it wasn’t bearish. China’s Auto House web page reported that NIO is now in the final phases of sorting out its recent 2d-technology battery-swap stations. The corporate expects to initiate deploying the stations in April.

A NIO ES8, an upscale electric SUV, inside an automated battery-swap station.

NIO plans to initiate rolling out recent variations of its automated battery-swap stations in April. Checklist source: NIO.

NIO’s roughly 200 battery-swap stations personal turn out to be a key phase of its general enterprise formulation. Traders of most modern NIOs can remove to remove the vehicle with out a battery pack, which lowers the remove designate, and lag for a subscription to the battery-swap provider, which affords NIO ongoing earnings after the vehicle sale. 

The recent 2d-technology stations can cope with more autos per day than NIO’s most modern stations, and can total the swap operation in less time than the roughly three minutes required on the most recent stations. The corporate hopes to personal 500 of the recent stations up and working in China by the finish of this 300 and sixty five days.

Auto investors can be taught about ahead to discovering out more regarding the recent stations when NIO experiences its fourth-quarter and whole-300 and sixty five days 2020 earnings after the U.S. markets end next Monday, March 1.


John Rosevear owns shares of Ford. The Motley Fool owns shares of and recommends Tesla. The Motley Fool recommends Bitcoin. The Motley Fool has a disclosure policy.”>

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