Why Nio Stock Is Crashing Today
What happened
Shares of Nio (NYSE: NIO) were tumbling again Thursday after sliding Wednesday. Traders are likely reacting to recent news about supply chain problems at Ford and Rivian Automotive.
The Chinese electric vehicle company's stock price was down by 8.6% as of 2:22 p.m. ET.
So what
Nio's stock price has been tumbling since the company made public its February vehicle delivery numbers on Tuesday. While its auto deliveries were up by 10% year over year for the month, that was a marked growth slowdown from the 34% increase in deliveries that Nio reported in January.
Image source: Nio.
But investors may be continuing to sell Nio shares Thursday based in part on comments from Ford CFO John Lawler on Wednesday. Lawler said his company is facing supply chain challenges in acquiring the raw materials it needs, and that "geopolitical issues are exacerbating" the problem.
Those comments came just two days after Rivian Automotive -- a U.S.-based EV company -- told some of its potential customers that it will have to raise the prices of its vehicles because of rising costs. Rivian initially told customers who had reserved vehicles that their prices would increase, too -- by as much as 20% -- but the company walked that back Thursday and said the price increase will only be applied to new customers.
With both Ford and Rivian indicating that supply chain constraints are hurting their businesses, Nio investors may be worried that the company could experience the same issues.
Now what
There are a few things that EV investors should keep an eye on right now. High inflation, upcoming interest rate increases by the Federal Reserve, the war in Europe, and supply chain constraints could all have significant impacts on automotive companies.
Investors will get a clearer picture of how Nio is doing when it reports its latest quarterly results on March 24. The recent stock price slide doesn't mean that Nio isn't a good long-term investment, but investors should brace for more market volatility in the short term as major macroeconomic events impact the EV market.
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns and recommends NIO Inc. The Motley Fool has a disclosure policy.
