What happened

Shares of Chinese electric-vehicle maker NIO (NYSE:NIO) were rising on Tuesday morning, as buyers waded in a day after the shares were hit in a broad U.S. market sell-off on COVID-19 concerns.

As of 11 a.m. EDT, NIO's American depositary receipts were up about 5.4% from Monday's closing price.

So what

Shares of NIO and several other electric-vehicle makers were hit hard in Monday's market sell-off, as investors appeared to be unloading higher-volatility stocks on economic concerns related to rising numbers of coronavirus cases in the U.S. and Europe. NIO's shares ended Monday's session at $26.01, down about 4.2% from Friday's close.

As I wrote yesterday, I think that was a general de-risking sell-off. But NIO is unlike many of the other companies that were hit by yesterday's market action. For starters, NIO doesn't yet sell vehicles in either the U.S. or Europe, only in China -- and China still appears to have the coronavirus under control for the moment. 

A silver NIO EC6, a sporty upscale electric SUV, on an auto-show display stand.

NIO's latest model, the sporty and upscale EC6 electric crossover, began shipping in September. Image source: NIO.

On top of that, NIO is expected to deliver a strong result when it reports third-quarter earnings next month. Consider these highlights from the quarter:

  • NIO's sales surged 154% in the quarter from a year earlier, with 12,206 vehicles delivered -- solidly beating NIO's own guidance from August;
  • NIO launched its new EC6, a sporty crossover, in September as planned;
  • NIO successfully raised capital to buy back some of the equity it gave up in a bailout deal in May;
  • NIO completed work on its production line that allows it to increase its monthly output from roughly 4,000 vehicles to about 5,000; and 
  • NIO launched its batteries-by-subscription program, substantially lowering the initial purchase cost of its vehicles for buyers who opt into the plan. 

Long story short: NIO's stock fell on Monday amid a broad-market sell-off, but investors who understand the company appear to be wading back in today.

Now what

Auto investors are looking ahead to NIO's third-quarter report, not only for the numbers but for some insight into what lies ahead for the fast-growing carmaker. The company hasn't yet announced a date for the report, but I expect it in mid-November.