Nio (NYSE:NIO) stock tumbled as much as 9% in early trading after the Chinese electric vehicle maker announced that it would temporarily halt production. The automaker made the decision because a number of its suppliers have stopped manufacturing their products in the wake of an outbreak of Covid-19 in China. The Asian country has responded to the outbreak by implementing strict lockdowns in some cities.
“There will be a delay in the delivery of vehicles for many customers in the near future, and we ask for your understanding,” Nio said in a statement. The automaker, however, reported that it would seek to collaborate with its suppliers to restart its production and deliveries at the earliest possible time.
Analysts Are Still Bullish on NIO Stock
On a positive note, the sales of electric vehicles more than doubled year over year last month in China, Citi stated. According to the firm, the number of battery electric vehicles sold in the country jumped 120% in March versus the same period a year earlier to roughly 371,000.
Last month, Nio’s unit sales climbed 40% YOY, significantly trailing the growth of China’s EV sector as a whole.
But UBS analyst Paul Gong recently raised his rating on NIO stock to “buy” from “hold.” The analyst expects the company’s growth to expand as it introduces new EVs. He cut his price target on the shares to $32 from $42, but his new target is well above the current price of about $19.
On the date of publication, Larry Ramer 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.
