Nio (NYSE:NIO) stock is sinking as much as 7% this morning after the Chinese electric vehicle (EV) maker lowered its fourth-quarter delivery outlook and Tesla (NASDAQ:TSLA) temporarily shut down its factory in China. Moreover, the American automaker reportedly intends to halt production at its plant again in late January. The news is intensifying concerns about the demand for EVs in China.
Nio is the top trending ticker on both Yahoo! Finance and Stocktwits following these recent developments.
Nio’s Delivery Targets and Tesla Shutdowns
Nio now expects to deliver 38,500 to 39,500 EVs this quarter, well below its previous estimate of 43,000 to 48,000 EVs. The automaker blamed its outlook cut on supply issues and bureaucratic delays that have caused its deliveries to be postponed.
Additionally, as of Dec. 24, Tesla stopped production at its Shanghai plant and does not intend to resume making EVs there until Jan. 3. According to Reuters, the halt was triggered by the automaker’s decision to reduce production of its Model Y EV, an SUV, by 30% this month.
Meanwhile, after resuming production at its Shanghai plant on Jan 3, Elon Musk’s automaker intends to close the factory again from Jan. 20 until Jan. 31, Reuters reported, citing an internal Tesla document.
China’s Lunar New Year occurs on Sunday, Jan. 22. Also noteworthy is that the country is coping with a Covid-19 outbreak following its easing of its anti-coronavirus rules.
What It Means for NIO Stock
Before trading began today, NIO stock had retreated 38% in the last three months and 5.5% in the last five trading days. During the same periods, TSLA stock has fallen 58% and 23%, respectively.
On the date of publication, Larry Ramer did not hold (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.