Stocks like Nio ($NIO), Tesla ($TSLA), and XPeng ($XPEV) fall on an chip shortage warning. The warnings will inevitably slow down production.
Shares dropped 10% to 44.79 on the stock market today. Nio stock remains under the 50-day line after a failed breakout past a 57.30 buy point. The relative strength line, which compares a stock’s performance vs. the S&P 500, is now below January 2021 highs.
Among other EV stocks, Li Auto (LI) fell 5.5% Tuesday. Last week, the Chinese electric-vehicle rival reported a surprise profit.
Subsidy cuts and rising competition from tech and legacy auto giants in China are also weighing on Nio stock and its EV peers. Tesla cut the price of its made-in-China Model Y, a rival to Nio’s new EC6 electric crossover.
Two versions of the much-cheaper Volkswagen (VWAGY) ID. 4 are due to begin China deliveries by the end of March.
Meanwhile, Nio in January announced the ET7 electric sedan, a Tesla Model 3 rival due next year, and it plans to expand into Europe in 2021. However the future is still bright for NIO stock.