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NIO Stock Cools Off Despite 10% Jump in February Electric Vehicle Deliveries

Nio (NYSE:NIO) stock is slipping this morning despite the company announcing a nearly 10% increase in its February deliveries. So what do you need to know?

A Nio (NIO) sign and logo on a tan concrete building.
Source: Sundry Photography / Shutterstock.com

NIO stock is down 2% in morning trading following the news that the electric vehicle company delivered 6,131 vehicles in February, a 9.9% year-over-year increase.

Today’s pullback follows a 24% rally in the company’s share price since Feb. 24 after Nio announced that it is pursuing secondary listings on stock exchanges in Hong Kong and Singapore.

What Happened With NIO Stock

Nio said in a news release that its February production increase came despite its main manufacturing plant being closed from Jan. 31 to Feb. 6 due to China’s Spring Festival holiday. The company also said that it has adjusted its production lines to prepare for deliveries of its new ET7, an electric sedan that boasts a 1,000-kilometer driving range on a single battery charge. These deliveries are expected to kick off later this month.

Its cumulative deliveries across all of its electric vehicles have now reached 182,853. And, in the same news release, the company said that it has received approval from the Stock Exchange of Hong Kong for its planned secondary listing of its Class A ordinary shares. NIO stock is expected to begin trading on the Hong Kong exchange on March 10.

Why It Matters

Nio is a leader in China’s electric vehicle sector. It is also considered a main rival of global market leader Tesla (NASDAQ:TSLA). As such, analysts and investors closely watch its delivery figures. They not only provide an indication of Nio’s performance, but also of the entire automotive industry within China.

That Nio beat its year-over-year delivery figures by nearly 10% in February is positive news. So too is news that its shares have been approved to begin trading in Hong Kong in coming weeks. The decline in NIO stock today likely has to do with broader market weakness as the ongoing conflict in Ukraine drags equities lower around the world. All of the major U.S. stock indices are down today.

Nio stock had been badly beaten down in recent months. Its share price has fallen 42% over the past six months, and that’s after the 24% rally in recent days. The decline has been due to a combination of market volatility and a general retreat from Chinese securities in the wake of ongoing crackdowns on publicly traded companies by government officials and regulators in Beijing.

What’s Next for Nio

Today’s decline is likely to be temporary, and the positive February delivery numbers should help to keep NIO stock buoyant in the near term. Looking further ahead, Nio will need to keep exceeding its targets and keep its vehicle production on pace in order to keep its share price recovery in motion.

Investors and analysts can be expected to keep a close eye on Nio moving forward.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

Article printed from InvestorPlace Media, https://investorplace.com/2022/03/nio-stock-cools-off-despite-10-jump-in-february-electric-vehicle-deliveries/.

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