Nio (NIO 0.27%) shares have been pushed and pulled in both directions this week. But Nio enthusiasts are gaining the upper hand to end the week, helping its American depositary shares to pop 6.6% Friday morning. The stock tempered those gains somewhat, but still remained 2.4% higher as of 11:40 a.m. ET.
The up-and-down movement this week has mostly been down, with investors growing increasingly concerned about how COVID-19-related lockdowns in China will ultimately affect the company and its path for growing production. But some positive news from rival Tesla yesterday has some investors betting the recent sell-off has been overdone.
In reporting a record quarter, Tesla told investors the production suspension at its Shanghai plant has started to ease. The plant is back operating at a limited capacity. Nio's plant is in Hefei, which is about 300 miles from Shanghai. But it has suppliers that were directly affected by the lockdowns, forcing Nio to suspend production for several days this month.
The coronavirus wave in China hasn't yet eased, so uncertainty remains regarding how much impact it will ultimately have on Nio's operations. Tesla's Shanghai plant has been directly affected by the lockdowns, and most of the impact will be felt in the second quarter. But the company didn't guide investors to be overly concerned by the lost production.
Investors in Nio are likely taking their cue from that, especially since this is such a long-term story. Nio just began production of its new ET7 luxury sedan, and it plans to launch a new midsize sedan and a new SUV later this year, too.
After the stock already dropped more than 10% this week, and more than 25% over the last three weeks, investors might just be thinking it is at a near-term bottom today.