On Thursday morning, shares of Nio (NYSE:NIO) fell significantly and were down 7% as of 12:30 p.m. Eastern Time. The company has recently reported monthly sales figures among several Chinese manufacturers of electric vehicles (EVs). Despite the company’s success relative to its competitors, investors are beginning to doubt the company’s ability to develop rapidly shortly.
What’s the Reason?
In August, Nio shipped 10,677 cars, an increase of 81.6% year over year. Despite a 6% sequential increase in shipments, shortages persist due in part to China’s COVID-19 lockout limitations and other factors. The company’s yearly deliveries went up by 28.3% despite these obstacles.
In particular, the company August sales figures obliterated those of competitors XPeng and Li Auto. Even though it began delivering its flagship SUV, the Li L9, which debuted in June last month, Li Auto saw a 52% drop in deliveries compared to August last year.
Nio began shipping its new five-seat SUV, the ES7, at the end of August, and by the end of the month, 398 had been shipped out.
Deliveries of the ET7, the only sedan the company sells now, increased by 26% sequentially in August, bringing the total number of sedans delivered by Nio in the month to 3,126. This is promising news, as the company began ET7 shipments in March despite COVID-19 bans.
Those are impressive shipment totals, but investors may be skittish due to worries about the economy as a whole. While fighting a catastrophic drought that has damaged the hydropower industry and threatens crucial EV supplies like batteries, China has imposed new COVID-19 lockdowns in select locations.
Moreover, the United States government has recently ordered two major chipmakers, Nvidia and AMD, to cease exporting specific semiconductor chips to China, a concern for Chinese EV manufacturers. According to the reports, the A100 chips used by Nio in its EVs are restricted.
In the midst of a hectic second half of the year, that is the last thing Nio needs to see. Nio is rapidly growing; the company just sent its first ET7 sedans to Europe and will begin delivering ET5 sedans in China this month. CnEvPost claims that approximately 200,000 people have already placed orders for the company’s new vehicle.
Nio hopes that with the release of ET5, the company will experience a significant uptick in its fortunes. Sales of the car are expected to begin in the coming weeks and, barring any interference from macro factors, could help boost monthly delivery totals.
Featured Image – Megapixl © Michaelvi