Today, investors in Nio (NYSE:NIO) and NIO stock are seeing quite a nice turnaround. Like the broader tech sector, it appears sentiment is finally starting to shift back into bullish territory.
Shares of NIO stock opened 5.5% lower. However, at last check, NIO stock is up 2% on the day in a dramatic reversal.
Indeed, Nio’s stock chart looks remarkably similar to that of the Invesco QQQ Trust (NASDAQ:QQQ). Nio has traded in high correlation to tech stocks in general, as a high-growth play in the emerging EV space.
However, there’s another catalyst driving Nio stock today. It appears Nio’s fortunes in China are looking much brighter following today’s news. Let’s dive into what’s going on with NIO stock.
China News Driving NIO Stock Higher Today
Reports today that EV rival Tesla (NASDAQ:TSLA) is having troubles in China appear to be bullish for NIO stock. Indeed, EV investors appear to be viewing Tesla’s loss as Nio’s gain as the race for Chinese market share heats up.
According to recent reports, Tesla sold less than 26,000 Chinese-made EVs in April, down from more than 35,000 units in March.
These reports, compounded with previous bearish news that China would be moving to restrict the use of Tesla vehicles by government employees and officials, continues to move the needle on TSLA stock. Tesla has seen its share price dip today on this news.
Elon Musk has publicly attempted to assuage concerns via talks with Chinese government officials. However, it appears Tesla’s built-in camera systems are a no-go for Chinese authorities looking to clamp down on American companies following rather bitter diplomatic talks of late.
As the “golden child” of the Chinese EV space, investors in NIO like this news. Less competition means more profit for NIO. At least, that’s the hope.
Today’s topsy-turvy market has made for an exciting ride for EV investors. How this drama ultimately plays out remains to be seen. However, this news appears to be noteworthy for EV investors today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.