What happened
Shares of Chinese electric vehicle maker Nio (NIO +5.50%) were trading modestly lower at midday on Tuesday, amid a broader sell-off of electric vehicle (EV) stocks and as it deals with the aftermath of two fatal crashes in China.
As of noon EDT today, Nio's American depositary shares were down about 2.3% from Monday's closing price.
So what
Shares were holding up fairly well amid a broader sell-off of EV names. Two relative newcomers in the space, Romeo Power (RMO +0.00%) and Lightning eMotors (ZEV +0.00%), reported earnings results on Monday afternoon that missed Wall Street estimates. Category leader Tesla (TSLA 0.88%) was also trading lower for a second day on concerns about the U.S. government investigation into collisions implicating its Autopilot system.
Nio is dealing with a similar situation in China. A prominent entrepreneur, Lin Wenquin, died last week after his ES8 rear-ended another vehicle while Nio's own hands-free driving system was activated. The English-language paper China Daily reported on Monday that police in Fujian province are investigating the accident, and that Nio is cooperating with the investigation and has provided assistance to Lin's family.
A NioES8. Prominent restaurateur Lin Wenquin was killed last week when his ES8 hit another car while a hands-free driving system was engaged. Image source: Nio.
It's possible that the stock was simply moving lower with the broader cohort of EV stocks, but the Lin accident might have been on the minds of investors already concerned about the Tesla investigation.
Now what
Last week's crash was the second fatal accident involving a Nio in recent weeks. On July 30, an ES6 hit a stone pier in Shanghai and burst into flames, killing its driver.
The two fatalities have drawn attention from Chinese regulators. An editorial in the state-owned business newspaper Securities Times on Monday warned the country's EV makers that their highest responsibility is to ensure safety, and that stricter rules and oversight could be forthcoming.
While Nio isn't in the same category as the online businesses that have drawn the Chinese government's ire over the last several weeks, that stern warning might also be weighing on the stock today.
