What happened
Heading into this week's final day of trading, shares of Chinese EV maker Nio (NIO 2.30%) are on track for a double-digit weekly drop. The company's American depositary shares (ADSs) are lower by nearly 12% so far this week, according to data provided by S&P Global Market Intelligence.
So what
Investors have been shunning riskier assets recently, and Nio shares certainly should be included in that group. The Nasdaq Composite index itself has dropped more than 12% since Sept. 12. In that time, Nio shares are down 28% as unprofitable stocks have taken some of the hardest hits.
Now what
While the focus hasn't been on any specific news from Nio's business this week, there are several items to note. First, competitor Li Auto said in an update that its third-quarter deliveries were going to come up short of expectations. Li said it now expects to deliver 25,000 of its electric vehicles in the third quarter, down from previous estimates of between 27,000 and 29,000. The company said supply chain challenges are the issue and that demand remains strong. But Nio could be facing similar supply chain constraints.
Separately, major Chinese EV battery supplier Contemporary Amperex Technology, or CATL, is reportedly looking at expanding its battery swapping business, according to CNBC. Nio's battery subscription service allows consumers to effectively rent batteries, saving upfront vehicle costs. Nio already has more than 1,100 battery swap stations in China that can replace a drained battery with a fully charged one in minutes. It plans to add 1,000 outside China by 2025, and CATL seems to want to directly compete.
Investors will find out more about Nio's plans outside of China next week. The company will be holding an online event called Nio Berlin 2022 on Oct. 7, with company executives providing investors more information about its push into Europe. Specifically, the company will share more about upcoming market and model launches, as well as plans for its power and service infrastructure business. That event likely won't move the stock, but those thinking about investing in Nio now that the stock has dropped so much should pay attention.
