Extends losses as Chinese electric vehicle manufacturers continue to slip

  • NYSE: NIO down 10.23% as the electric auto industry remains battered.
  • NIO receives bullish outlook from Goldman Sachs, despite the two-day correction.
  • NIO sets a new monthly record for car deliveries in November.

The news remains positive for NYSE: NIO, but the association as a Chinese electric vehicle manufacturer is enough to deter investors. On Tuesday, the stock continued its decline as NIO lost an additional 10.23% to close out the trading session at $ 45.36, representing a 20% discount over the past week. NIO’s rivals XPeng (NYSE: XPEV) and Li Auto (NASDAQ: LI) also continued to tumble, based on the fraudulent allegations against another Chinese electric vehicle manufacturer Kandi (NASDAQ: KNDI). Investors’ distrust of Chinese companies and their reporting structure is again emerging.

Despite its stock performance this week, it’s not all bad news for NIO. On Tuesday, the stock received a long-awaited bullish upgrade from Goldman Sachs analysts as the company changed their stance from selling to holding. The upgrade is a mea culpa from Goldman Sachs as the new Battery Swap program is one of the things that sets Nio apart from its competition. NIO also announced that its car deliveries set another monthly record in November, as the last month turned out to be a 109% year-on-year increase over 2019.

NIO stock news

NIO stock price chart

The current correction in NIO’s stock price could be a great buying opportunity for investors who remain optimistic about NIO’s future outlook. The outcome of the House of Representatives vote that could determine the future for Chinese companies listed in US markets could be another issue weighing on investors’ minds. Many investors may simply be satisfied with the profits they have made so far at NIO this year and have chosen to move to more stable investments.

NIO stock price and forecast: Plummets amid more allegations of Chinese fraud

  • NYSE: NIO plummets 6.43% as Chinese and electric car companies took a beating.
  • Chinese electric vehicle company Kandi has been accused of fraudulent sales figures.
  • The House of Representatives will vote on the future of Chinese companies at US stock exchanges.

NYSE: NIO started trading Tuesday down about 6.5% to about $ 47.14 at time of writing. The Chinese electric vehicle manufacturer is not the only industry share affected Nikola (NASDAQ: NKLA) down 16% while Workhorse (NASDAQ: WKHS) weathered the storm down just 2%. Will bargain seekers jump on any of these stocks? Not all EV stocks are created equal, and some may present greater opportunities than others.

NYSE: NIO was among a number of Chinese stocks attacked on Monday as reports of fraudulent activity by a rival company led to its worst sell-off in months.

The company in question at the center of the fraudulent allegations is Kandi (NASDAQ: KNDI), an industry rival to Nio, and one of many Chinese electric vehicle manufacturers that have been on fire this year. A well-known industry short-seller reported on Monday that Kandi is spicing up its sales reports to bring in money from US investors. Kandi’s stock went into free fall after the report, losing nearly 30% of its value, which of course is exactly what a short seller would want. Whether these claims are true or not, it seems to have come a little too close to home for investors after similar business with Chinese companies like Luckin Coffee.

The future of Chinese companies that can be listed on US stock exchanges is in the air as the House of Representatives is currently voting on a bill that could potentially force these companies to go off the stock exchange in the next three years. The fraud allegations against Kandi are just another bump on the long road of mistrust between China and the United States, and while Nio investors should be safe, the reality is that these tensions could very well be culminating for the US government.

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