What happened
Shares of Chinese EV maker Nio (NIO 3.42%) have bounced around in March as investors balanced geopolitical risks with near-term catalysts for its growing business. In the first half of the month, shares dropped more than 20%. But the stock rebounded more than 30% in the final two weeks of March. Today, the fears that drove the early declines took back the headlines. Investors reacted as they did in early March, with Nio shares down 5.6% as of 1:30 p.m. Thursday.
So what
That's because concerns over the delisting of Chinese stocks on U.S. exchanges has investors spooked once again. Yesterday, the Securities and Exchange Commission (SEC) named another set of five Chinese companies that could face delisting if they fail to disclose proper financial audits to U.S. regulators. Nio wasn't one of them, but it seems some investors are getting scared out of Chinese names in general.
Nio is delaying the launch of its newest ES7 SUV by at least one month. Image source: Nio.
Now what
In addition to those jitters, Nio reportedly delayed the launch of its ES7 SUV. The ES7 will be the third in its SUV lineup that includes the ES6 and ES8, but will be the first to use Nio's NT2.0 technology platform. Nio was going to unveil the ES7 next month, but CnEVPost reports that will now be delayed until the end of May, likely due to new COVID-19 restrictions.
The company did begin shipments of its ET7 luxury sedan this week, however. It also is using Nio's second generation platform. So while general concerns remain surrounding U.S.-listed Chinese stocks, and COVID-19 related lockdowns are impacting many manufacturers in China, Nio continues to advance its product lineup.
For investors willing to take on the geopolitical risks associated with it, Nio's share drop brings an opportunity to invest and focus on the underlying business.
