Electric vehicle (EV) maker NIO (NYSE:NIO) is in trouble. Besides the macroeconomic issues like inflation and interest rate hikes, the automaker has had supply chain issues, which led to low deliveries and now there are concerns of possible delisting from U.S. exchanges. NIO stock gained this week, but gave up most of those gains on the same day. The stock was once trading as high as $42 in November 2021, but it hasn’t been able to impress investors. It is currently trading for $13, much lower than its all-time high.
I have covered NIO stock several times in the past and I believe the company has the potential and the technology to make its mark in the competitive EV industry. Delisting concerns have put immense pressure on the stock, but I think the reaction is overblown. Nio is already looking for a secondary listing on the Singapore stock exchange. It will start trading on the exchange on May 20.
More positive news that will help NIO stock gain upward momentum is an agreement signed by Nio to build a plant for their mid to high-end brand models in an economic development zone in Hefei, China. This plant could start production in 2024 and it will compete with some of the biggest names in the EV industry. If CnEVPost’s latest report is anything to go by, it could be huge for the automaker.
Nio is already working on plans to launch a mass-market brand by making a fleet of affordable and accessible models to its buyers. Once Nio makes an official announcement about this, we could see the stock going higher.
My InvestorPlace colleague Ian Cooper has four more reasons to consider NIO stock. If you own Nio, avoid panic selling. It is too soon to write off them off based on the delisting concerns. As the broader market recovers, NIO stock will gain.
On the date of publication, Vandita Jadeja 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.