What came about
Shares of Chinese language electric car maker Nio (NYSE:NIO) were Trading lower on Monday morning amid a great-basically based sell-off driven by concerns spherical the heavily indebted Chinese language property developer China Evergrande Community (OTC:EGRNF).
At 11: 30 a.m. EDT, NIO’s American depositary shares were down about 5% from Friday’s closing mark.
You would possibly well delight in doubtlessly heard that Evergrande is idea of as shut to chapter, that the Chinese language authorities is idea of as unwilling to bail it out, and that its failure would possibly well delight in great outcomes on stocks in China and presumably beyond.
Straight away, it is removed from positive that an Evergrande chapter would possibly well delight in something else address the market-rocking systemic outcomes that we saw after Lehman Brothers failed in 2008. But Evergrande is now not the absolute most life like Chinese language property developer at risk of being swamped by debt, and traders appear in fact interested that — while it’d now not be 2008 right by again — a sectorwide crumple of China property developers would possibly well delight in outcomes a ways beyond the country’s true-estate market.
That’s why Nio is down currently, but we would possibly restful uncover that many completely different stocks — including these of assorted automakers with slightly tiny publicity to China — are down as successfully.
Investors are afraid about Evergrande — but Nio’s busy increasing its battery-swap network. Image supply: Nio.
To be positive, there wasn’t any harmful Nio-explicit news utilizing the stock lower on Monday, or any news at all from the company. But there is one tiny update for auto traders to ponder: Per online page online CnEVPost, which tracks the electric car alternate in China, Nio now has 479 battery-swap stations up and running within the country, up from 361 as of its Aug. 12 earnings document.
This article represents the belief of the author, who would possibly disagree with the “authentic” advice space of a Motley Fool top charge advisory service. We’re motley! Questioning an investing thesis — even one in every of our have — helps us all mediate seriously about investing and compose decisions that attend us change into smarter, happier, and richer.
John Rosevear has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends NIO Inc. The Motley Fool has a disclosure policy.”>