What happened
Nio (NIO 7.51%) stock rocketed Wednesday morning and was trading up 8.8% as of 11:33 a.m. ET. Investors in the electric vehicle (EV) stock found plenty of fodder today: A popular investor just bought Nio stock for the first time even as China might be rethinking its stance on meeting U.S. regulations that threaten delisting of Chinese stocks in the U.S.
On the flip side, Nio is postponing the launch of a vehicle as China battles a surge in coronavirus cases, but investors don't seem worried.
So what
Nio was expected to launch its first SUV, the ES7, in April. However, with the Beijing auto show scheduled for April 21 now likely to be postponed amid a COVID-19 surge, Nio will unveil the ES7 in late May, according to CnEvPost, a website focused on new energy vehicles (NEVs).
What's important to note is that Nio isn't alone -- at least a couple of local EV start-ups have just delayed their launches.
Image source: Getty Images.
This morning, CnEvPost also reported slower auto sales in China as several cities have gone into a lockdown. Tesla, for example, suspended production at its Shanghai factory starting this week amid the lockdown. CnEvPost cited preliminary data from the China Passenger Car Association (CPCA) that revealed a 13% year-over-year drop in average daily car sales in China during the first two weeks on March.
However, this data pertains to all passenger cars, and not just NEVs. The CPCA said there's little impact on the sales of NEVs despite several companies increasing prices of cars in recent weeks.
In short, investors in Nio may not have much to worry about when it comes to sales growth in China for now and can focus on the bigger things instead. One of them is speculation about China looking to break a deadlock with the U.S. on accounting standards.
Yesterday, a report from the South China Morning Post said China is reportedly trying to find solutions to meet the U.S. Securities and Exchange Commission's rules that require foreign companies to get their accounts audited, among other things, or face the risk of their stocks getting delisted from the U.S. stock exchanges.
Any progress on this front could help reverse the negative investor sentiment in Chinese stocks that's been bubbling for months now.
Now what
News is also out that Ark Invest's founder and popular investor Cathie Wood bought Nio shares for the first time last week.
NYSE: NIO
Key Data Points
Wood owns several EV stocks across her Ark Invest exchange-traded funds, including Tesla, but added Nio only now. That means something about Nio has caught Wood's attention; and given her popularity in the investing community, it's not surprising if some investors are emulating Wood's move today.
