What Does the Drop in Production Mean for Nio?
It's normally not a difficult decision for what an investor should do when a highly valued growth stock stops growing. People typically run for the hills, and the stock price crashes. But after Chinese EV maker Nio (NYSE: NIO) reported a nearly 30% year-over-year drop in April deliveries, investors took it in stride.
That's because the problem is likely to be short term, and is not a company-specific issue. Beyond the disappointing slowdown in production last month, Nio said its factory is slowly ramping back up after COVID-19-related supply chain issues caused it to suspend production in April. And investors are likely putting more weight on some new catalysts that will drive the business versus the current challenges that should be overcome.
Nio delivered 693 of its new ET7 sedans in April. Image source: Nio.
Source Fool.com
