What happened
Shares in many Chinese companies have been facing headwinds, as investors in U.S.-listed Chinese stocks have been facing uncertainties related to regulators in both countries. But now a new concern has also arisen, and shares are heading down once again. Electric vehicle maker Nio (NIO 0.72%) is one example of a company whose stock is being affected. Nio shares were down nearly 6% early Monday. Shares were only down 1.2% as of 11 a.m. ET, but the stock has still been down about 11% over the past five days of trading.
So what
Chinese authorities continue to battle a new surge in COVID-19 cases, and there are concerns that Beijing may soon be facing a citywide lockdown, according to a report by The Wall Street Journal. Shanghai lockdowns have already caused supply chain issues for Nio, even with its Hefei manufacturing facility about 300 miles from the city.
Image source: Getty Images.
Now what
Nio was forced to suspend production for several days earlier this month when its suppliers weren't able to keep orders moving due to the lockdowns. While its production has resumed, new fears of extended and expanded lockdowns could have further impacts.
The lockdown in Shanghai is now entering its fifth week, and the International Monetary Fund cut its 2022 economic growth forecast for China last week, due to its effects. With Beijing now potentially facing similar impacts, there could be more warnings about production slowdowns coming from manufacturers like Nio.
Long-term investors can look past these issues with several catalysts underway for Nio to grow. Those include new vehicle introductions and an expansion of sales in Europe this year. But some investors have been looking at the short-term implications of additional supply chain woes, causing shares to be trending down along with other Chinese names recently.
