What happened

Nio (NIO 2.30%) shares popped almost 15% yesterday in a bit of a relief rally after nearly a month of steady drops. But the stock of the Chinese EV maker couldn't advance those gains today, with shares down 4.2% as of 12:25 p.m. ET. 

So what

Today's reversal comes even as a report from Reuters says the Chinese government may be looking to extend help for Chinese EV makers in the form of buyer subsidies. But investors today may be thinking that more needs to be done.

Nio ET7 sedans leaving its Hefei factory.

Image source: Nio.

Lockdowns in some parts of Shanghai have been in place for nearly two months. And while Nio's Hefei production facility is about 300 miles from the city, needed parts have been limited, forcing Nio to alter, or even suspend, production schedules over the course of that time. Demand was stifled enough, too, that not a single car -- electric or otherwise -- was sold in the city of Shanghai in April, according to Bloomberg.

Now what

Now, as lockdowns have begun to ease, the Chinese government is looking at ways to help the damage done to the economy. Subsidies for China's electric vehicle buyers that have been in place for years are scheduled to end in 2022. According to the Reuters report, government authorities are now considering continuing EV subsidies beyond this year. 

One approach that is being discussed is to roll back the level of a planned purchase tax for EVs that is set to begin next year. Subsidies have already been declining in amount, and lowering a new, upcoming tax may not be looked at by investors as a real benefit.

The details haven't been finalized, however, and no official announcement has been made. Any help in growing the demand for electric vehicles would be welcome by investors, but based on today's stock move, perhaps the approach being discussed wasn't as much help for the industry as they would like to see.