What happened
Nio (NIO -0.48%) stock slumped Thursday morning and was down 7% as of 12:30 p.m. ET. Nio is among the several Chinese electric vehicle (EV) manufacturers that just released their monthly sales numbers. Although Nio outperformed rivals, investors are turning skeptical about the company's near-term growth.
So what
Nio delivered 10,677 vehicles in August, up a solid 81.6% year over year. Although its deliveries rose only about 6% sequentially, parts are still in short supply due to, among other things, the COVID-19 lockdown restrictions in China. Despite these challenges, Nio's year-to-date deliveries rose 28.3%.
Notably, Nio's sales numbers crushed rivals XPeng's and Li Auto's handily in August. While XPeng reported a 33% year-over-year rise in its August deliveries, Li Auto reported a 52% slump in its deliveries last month despite starting deliveries of its flagship SUV, Li L9, which was launched in June.
Nio started deliveries of its new five-seater SUV, ES7, at the end of August and had already delivered 398 units by the end of the month.
Nio also delivered 3,126 sedans in August, which means deliveries of ET7, the only sedan Nio sells as of now, rose 26% sequentially. That's an encouraging sign as Nio started deliveries of the ET7 in March amid COVID-19 restrictions.
Now what
Those are strong delivery numbers, but macroeconomic concerns appear to have spooked investors. China is imposing fresh COVID-19 lockdowns in some regions as it also battles a severe drought that has crippled the hydropower industry and poses a threat to key EV supplies such as batteries.
In another development that's of concern to Chinese EV makers, the U.S. government has just ordered two top chipmakers, Nvidia and AMD, to stop the export of certain semiconductor chips to China. The restrictions reportedly include Nvidia's A100 chips that Nio uses in its EVs.
That's not what Nio wants to see right now as it steps into a busy second half of the year. Nio is expanding aggressively: It just shipped its first batch of ET7 sedans to Europe and is preparing to start deliveries of its ET5 sedans in China this month. The company has reportedly amassed nearly 200,000 pre-orders for its new sedan, according to CnEvPost.
ET5 is touted to be a game changer for Nio. Slated to start selling in the coming weeks, the sedan should only add to monthly delivery numbers unless macro factors pose a hurdle.
