Why NIO Stock Is Down Today

Or now not it is now not comely Tesla, though that is half of it.

What came about

Shares of Chinese electrical-automobile maker NIO (NYSE:NIO) were Trading decrease on Thursday, after a Wall Dual carriageway analyst acknowledged that the ongoing global shortage of semiconductors will proceed to withhold NIO’s production down for some time longer.

As of 1: 30 p.m. EDT, NIO’s American depositary shares were down about 7.5% from Wednesday’s closing designate.

So what

Citibank analyst Jeff Chung, who lately hosted a call with NIO administration, wrote on Thursday that the chip shortage has remained “the critical constraint” for NIO’s production in Can also. NIO, along with Ford Motor Firm, BMW, and Honda Motor, has suffered from the effects of a February fireplace at Eastern chipmaker Renesas, which has diminished some auto suppliers’ receive admission to to chips even further for the time being. 

According to Chung, NIO acknowledged that it felt the affect of the Renesas fireplace peaked in early Can also, and administration now expects provides to originate up to enhance in June or July. Chung maintained his previous withhold ranking on NIO’s stock and his earlier designate purpose of $57.60. 

A NIO ES8 leaves a factory assembly line under a commemorative banner.

NIO constructed its 100,000th automobile in April, but a chip shortage has slowed its production in Can also. Image source: NIO.

That is per chance half of why NIO’s stock used to be down on Thursday. One more say is virtually completely the ongoing decline of electrical-automobile category leader Tesla, which appears to be like to be pulling down other EV names for the time being. 

Now what

No longer your entire files used to be immoral, though. Chung additionally eminent that NIO acknowledged market demand has recovered effectively since the Lunar Original Yr holiday duration in February, and that or now not it is confident that the tempo of newest orders will proceed to lengthen. 

While or now not it is continuously exhausting to study out a boost stock lose floor in mountainous strikes day after day, I judge that investors keeping NIO can grasp some comfort from the longer-term memoir, which remains — as Chung’s reward suggests — pretty perfect. 

This text represents the opinion of the writer, who also can disagree with the “genuine” advice space of a Motley Fool top class advisory provider. We’re motley! Questioning an investing thesis — even one in all our possess — helps us all judge severely about investing and invent decisions that wait on us change into smarter, happier, and richer.

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

Be taught Extra


Please enter your comment!
Please enter your name here