Shares of Nio Inc. took a hit as investors expressed concerns about the European Union’s investigation into government subsidies received by China-based electric vehicle makers. This news caused Nio’s stock to drop 2.3% in premarket trading, following a recent two-day rally.
On the other hand, Tesla Inc. experienced a 1.1% gain ahead of the market opening. Tesla has been cutting prices multiple times this year in order to stay competitive. The European Commission President, Ursula von der Leyen, has stated that the global market is flooded with Chinese-made electric cars, which are priced artificially low due to substantial state subsidies. As a response to this distortion in the market, the commission has launched an anti-subsidy investigation into electric vehicles coming from China.
Other China-based EV makers also experienced declines in their stock prices. Xpeng Inc. saw a decline of 3.4%, while Li Auto Inc. saw a decline of 2.1%. BYD Co. and Geely Automobile Holdings Ltd., who both began selling EVs in Europe this year, were also mentioned in the report.
Nio Inc.’s stock had been performing well, with an 18.9% increase over the past three months. However, this recent news may impact their upward momentum. It is important for investors to closely monitor the outcome of the EU investigation and its potential implications for China-based electric vehicle manufacturers.
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Sources:
– Associated Press