Sprechen sie Deutsche? Wunderbar!Germany is Nio’s next stop in its European expansion.
Electric vehicle maker Nio continues to gain popularity across the world and is expanding its reach in the European market. The automaker plans to start selling its latest luxury car in Germany from next year, after dipping its toes into the European market with Norway earlier this year.
Is the EV space really too crowded?The Chinese government is calling for consolidation in the increasingly crowded EV space, and with yet another crackdown on the cards, shares of Nio crash down 3% on Monday morning.
Chinese regulators love a crackdown, and it looks like another could be on the way as government officials vow to work on consolidating the packed world of electric vehicles. The growing industry in China boasts big dogs like Nio, Tesla (TSLA), XPeng (XPEV), and Li Auto (LI) as well as a growing number of smaller and equally impressive companies that add up to over 300 EV makers in the region. China’s minister for industry and information technology, Xiao Yaqing, said:
A consolidated domestic sector could mean trouble for U.S. listed stocks like Nio and Tesla (TSLA), and Nio dropped 3% in the first few hours of Monday trading before recovering to close up 1%.
Nio faces Hong Kong listing delaysChinese electric carmaker Nio has been planning its Hong Kong debut for a while now, but now the company is considering delaying the offering.
Chinese U.S. listed EV maker Nio saw its stock sink over 6% on Tuesday after announcing a $2 billion stock offering to raise funds for its planned Hong-Kong listing, and the very next day rumors rolled in that the company was facing delays in the process. Not only are investors not chuffed, but (unsurprisingly) Chinese regulators have flagged the listing and sent over a long list of queries. It’s unlikely the debut will happen before early 2022.
Prices recovered just under 1% on Thursday after its stock offering-induced drop the day before.
Investors put the brakes on stock offeringNio announces a $2 billion stock offering, sending prices down over 6%.
Shares of Nio slid on Tuesday after the company announced a fresh round of fundraising in the form of a $2 billion stock offering, aiming to raise money for its upcoming Hong Kong IPO. Given the latest crackdown from China on U.S. listed Chinese stocks, investors are understandably hesitant, sending prices down over 6%.
Nio delivery numbers take a hitShares of EV maker Nio lost 2% in pre-market trading after reporting a month-over-month drop in August's vehicle deliveries and cutting its third-quarter deliveries outlook. Nio delivered 5,880 vehicles in the month, far below its 8,000 vehicle production capacity and down over 25% from the 7,931 it delivered in July. The company cited the ongoing global chip shortage as the reason for the unexpected drop in deliveries.
The soft numbers will take a toll on third quarter earnings, and Nio has cut its Q3 guidance from 24,000 vehicle deliveries to 23,000 – which might be better news for investors than it looks, it would imply Nio expects to deliver 9,000 cars in September, a welcome uptick in production.
Nio slips on regulatory crackdownU.S.-traded shares of Chinese companies are retreating yet further after another strike from Chinese regulators, and Tesla rival Nio drops more than 8% as it battles the crackdown.
Shares of EV start-up Nio, along with a host of other U.S. listed Chinese stocks, are struggling through the week as a regulatory crackdown in China pumps the brakes on the stock. The decline comes on the back of Didi Global’s disaster at the start of the week, when Chinese regulators imposed devastating restrictions on the ride-hailing giant shortly after its Wall Street IPO.
China’s motivation behind the move seems to be legislation passed in December that will require Chinese companies listed in the U.S. to submit full audits or risk being delisted after three years. China doesn't want all that info shared, so it’s coming after big tech in a big way, starting with Didi Global. Apparently, the Chinese government is keen to keep listings on the Hong Kong exchange instead, where they can be more closely controlled. Should it succeed, that’s bad news for the upcoming pipeline of big Chinese listings on U.S. exchanges, a trend that has been picking up in recent years. Firms from mainland China and Hong Kong have raised around $6.6 billion so far in the U.S. this year, a record start to a year and an 800% increase on the first half of 2020, according to Bloomberg data.
The move might have thrown a spanner in the works for the future of potentially lucrative Chinese IPOs in the U.S., but has also dragged down those that already hold a dual listing, for fear of who might be next in the regulatory crosshairs. Nio lost 8.45% on Wednesday, search giant Baidu slipped 2.3% (BIDU), and Alibaba (BABA) dipped 1.7%.
On the plus side, the Chinese EV market is super hot right now and Nio is growing rapidly, with management is expecting sequential growth in deliveries in both the third and fourth quarters. Second quarter deliveries came in at about 22,000 cars, up from 20,000 in Q1, as the EV company tries to shake off the global chip shortage. So, swings and roundabouts.
Pop and drop for EV start-upTesla rival Nio has had an excitable week, with prices lifting on analysts support for its June sales report. The numbers look good, but the stock ends Thursday down 4.32%.
Nio has been making a name for itself in the electric market, and people have started paying attention. Leading up to its June and second quarter delivery numbers, prices lifted over 15% as excitement mounted, in part thanks to some bullish analyst commentary on Wednesday. Shares got a bump of just under 6% after Citibank analyst Jeff Chung raised his price target from $58.30 to $72 and reiterated his previous buy rating – the stock closed on Wednesday just above $53. His positive attitude was largely thanks to expectations that Nio would report impressive shipping numbers for the rest of 2021, so it’s everything to play for.
The car maker’s June numbers arrived on Thursday, showing that the firm has managed to shake off its chip shortage woes. It made over 8,000 deliveries in June – the first time the company has been able to hit that monthly milestone. It’s not quite the 115,000 that Tesla is aiming for over the same period, but it’s not bad for a start-up.
The company had set guidance of between 21,000 and 22,000 sales in the second quarter and came in at just under the top end of that range. The strong performance was more impressive considering the slump in monthly deliveries across the EV sector from May to April due to the global semiconductor shortage. The numbers bring deliveries for the first half of the year to almost 42,000, pretty close to last year's total of just over 43,000. For all the excitement, the stock started the day with a dip of just under 2% in the first two hours of Thursday morning, and traded pretty tightly all day within a range of only around $5, to close down 4.32% at $50.90.
However, the latest results are also a strong indicator that the electric vehicle market in China remains robust, which is good news for competitors like Tesla and Li Auto. With Tesla’s own Q2 delivery report expected any time now, watch this space...