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Why Nio Stock Rose Today

By Howard Smith – Aug 24, 2021 at 2:36PM

Key Points

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The Chinese EV company didn't waste any time rolling out a new test for users of its assisted driving feature after a fatal accident.

What happened

The stock of Chinese electric vehicle maker Nio (NIO -4.99%) continued a climb Tuesday that began at the end of last week. Shares are up about 7% in the last three trading days as investors are moving back into U.S.-listed Chinese stocks in general. Nio's American depositary shares were up almost 4% on Tuesday alone at the high, but settled to a gain of about 1.5% as of 1:40 p.m. EDT. 

Nio ET7 luxury electric sedan with cityscape in background.

Nio's ET7 luxury electric sedan will be available early next year. Image source: Nio.

So what

In addition to country-related regulatory concerns, Nio was in the news recently for a fatal accident involving one of its electric SUVs that was operating on the company's assisted-driving feature called Navigation on Pilot (NOP). In response, the company has started requiring drivers to take a test using the feature, according to CnEVPost, an industry news site dedicated to covering the new-energy vehicle industry in China.

Now what 

The Nio app rolled out a Pilot exam for its vehicle owners on Monday, according to the report. It features a six-minute video that reviews key features and information about the company's assisted driving features. The video reemphasizes that the assisted driving features are not meant for truly autonomous driving, and it requires owners to answer 10 quiz questions to complete. 

In the U.S., Tesla also faces scrutiny over its Autopilot feature after several accidents. Nio's video reiterates that drivers must maintain control when using its assisted-driving features, which are meant to set cruise speed and aid with staying in driving lanes. 

Investors probably consider Nio's additional educational tools a smart move, particularly with more-general concerns about regulatory risks in China. That may have helped the recent bullish sentiment for its shares to continue today.

Howard Smith owns shares of Nio Inc. The Motley Fool owns shares of and recommends Nio Inc. and Tesla. The Motley Fool has a disclosure policy.

Stocks Mentioned

Nio Stock Quote
Nio
NIO
$12.58 (-4.99%) $0.66

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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