Why NIO Stock Was Lower Tuesday

Shares of Chinese electric vehicle (EV) maker NIO (NYSE: NIO) have been on a downward trend recently. They're down 20% in the last month, and almost 40% year to date. Their slide continued Tuesday as shares dropped more than 6% at the market open, and remained down by about 4% as of 9:35 a.m. EDT.

Growth stocks in general have been shunned by traders recently as the market rotates toward cyclical and value names. And the electric vehicle sector is being hit particularly hard, as many of the stocks' valuations have outrun the growth in the underlying businesses. NIO has been no exception. But Tuesday's drop may have been exacerbated by news that sales of Tesla (NASDAQ: TSLA) vehicles in China, which are manufactured at its Shanghai facility, dropped by 27% in April compared to March, according to China's Passenger Car Association. However, that isn't necessarily a sign that Chinese consumer demand for electric vehicles is changing. 

NIO ES6 electric SUV. Image source: NIO.

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Source Fool.com