Nio (NYSE:NIO)
Even though there have been demonstrations in China over the country’s draconian “zero-COVID” rules to start the trading week, shares of the Chinese electric vehicle (EV) company Nio (NYSE:NIO) have not been negatively affected. Nio stock price increased by as much as 4.6% early on Monday. Nio stock was up 1.9% as of 12:05 p.m. Eastern Time when the market closed.
Then what?
This is partly due to the roughly fifty percent reduction in value that Nio stock prices have already seen over the previous three months, as well as the potential direction that China’s COVID-19 rules may take in the future. However, another possibility is that it is connected to a recent analyst downgrade of a Chinese competitor, which pointed to competition from Nio and other companies.
What’s Next?
Lockdowns that the Chinese government has implemented to contain the spread of COVID-19 have already affected the automotive industry in China, including Nio and other manufacturers. Protests against such measures were said to have taken place throughout the weekend in several different regions around the nation. Nio stock has dropped significantly recently, but investors have yet to learn how authorities will respond. That indicates that more restrictive rules and the effects such policies will have on production, and demand may already be included in the price of the shares. And if the government changes its stance to allow residents to have greater freedom, it might be positive for Nio and other electric vehicle stocks.
When lowering the shares of rival XPeng today, one analyst cited the competition from Nio and other companies as one of the reasons. In research sent by Barron’s, the analyst Johnson Wan from Jefferies lowered his recommendation for the stock from buy to hold, citing “intensified competition.”
This rivalry also involves automakers in addition to Nio, which is something that Nio must cope with on its own. But even though Nio stock has fallen to its lowest level in over two years, some investors probably still believe there is more room for growth.
Featured Image – Pexels © Pixabay
Author Shariq Khan 
