Initially enthusiastic about certain relevant electric vehicle (EV) news such as Tesla (TSLA), and Nio (NIO stock), investors have now become concerned about the state of the economy.
What went down is this:
It is likely that investors were processing the news that another electric vehicle manufacturer, Lucid Group, said that it would meet its vehicle production goal for the year as the market opened this morning, which caused the shares of the Chinese electric vehicle maker Nio (NYSE:NIO) to increase in value.
This morning, the EV stock saw a gain of up to 4.9% when it was trading. Sadly, the advance did not continue once investors assessed the most recent inflation data, which revealed that wholesale prices continue to grow. This caused the gain to be reversed. Investors are concerned that the Federal Reserve will maintain its policy of raising interest rates since inflation is on the rise.
As a direct consequence of this, Nio stock (NYSE:NIO) share price was down by 1.9% as of 10:59 a.m. Eastern Time.
Then what?
After hearing this morning that electric car manufacturer Lucid is on schedule to build between 6,000 and 7,000 vehicles in 2018, investors in Nio were probably initially excited about the company’s prospects. Lucid said today that it produced 2,282 vehicles during the third quarter (which concluded on September 30), a number that will assist the company in meeting its production goal for the entire year.
The announcement by Lucid that it would, in fact, reach its most recent objective is positive news for the firm since it had previously been necessary for the company to reduce its yearly production estimate.
Because electric vehicle stocks frequently respond to developments in the wider sector, the price of Nio’s shares is likely to have increased early this morning as a result of the positive news. If Lucid is successful in meeting its production targets, then investors in Nio will have greater reason to believe that the EV sector as a whole is on the right track and that Nio, too, will be able to achieve its objectives.
But investors immediately lost their enthusiasm after learning that the producer price index had grown by 0.4% in September, which was significantly more than the 0.2% gain that some experts had predicted it would achieve. This indicates that wholesale prices, with the exception of those for food, energy, and services related to commerce, have continued to rise, despite the Federal Reserve’s efforts to curb inflation by increasing interest rates. These efforts were unsuccessful.
Because of the rise, investors are concerned that the Federal Reserve will see this data as more indication that it must maintain a policy of aggressive rate rises in order to bring inflation down.
What happens next for Nio stock?
This morning’s early surge in the share price of Nio, followed by a decrease in that price, demonstrates how unpredictable the market now is.
Long-term investors need to keep in mind that the ups and downs in the share price have little to do with the fundamentals of the company’s operation, despite the fact that it might be frustrating to sit through these fluctuations. Nio might still wind up being an excellent long-term investment, but investors will most certainly need to be able to tolerate increased volatility in the short term.
Should you make an immediate investment of $1,000 in Nio Inc. (NIO stock)?
You should pay attention to the following information before thinking about Nio Inc. (NYSE:NIO)
Nio Inc. was not included on the list that was recently released by our team of award-winning analysts, who have determined what they think to be the 10 best companies for investors to purchase right now.
Featured Image- Megapixl @ RobertWei
Author Valerie Remorosa 
