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Is This Pension Fund Giving Up on NIO Stock?


  • The California Public Employees’ Retirement System (CalPERS) recently reduced its stake in Nio (NIO) stock.
  • This move comes amid rising tension between China and the West.
  • The Chinese electric vehicle (EV) maker continues to grow rapidly with government support.
Nio Berlin 2022, NIO stock
Source: THINK A / Shutterstock.com

The California Public Employees’ Retirement System (CalPERS), the largest U.S. public pension fund, recently revealed that it reduced its position in Nio (NYSE:NIO) stock. Nio is an electric vehicle (EV) company based in China.

CalPERS revealed the sale in a recent 13-F filing. The filing also shows that the fund sold shares of Apple (NASDAQ:AAPL), Intel (NASDAQ:INTC) and fellow Chinese EV maker Li Auto (NASDAQ:LI) during the first quarter. After the sale, the pension fund still holds about 2.2 million shares of Nio.

Shares opened today at about $8.25 apiece and a market capitalization of around $14 billion. NIO stock is down roughly 8% year-to-date (YTD).

NIO Stock: CalPERS Just Sold Shares of Nio

Nio makes innovative luxury EVs. The company is known for its battery swap system, innovative technology and lease-based export model.

Nio is also a Chinese company. The EV maker’s home country continues to be at odds with the West, as demonstrated at this weekend’s G-7 summit. Conservative U.S. investors have been pulling cash out of the country. Warren Buffett has even pulled out of Taiwan due to tensions with China.

This economic back-and-forth has obscured the growth of China’s EV market, including Nio. The company has more than tripled its sales since winning subsidies from the state government of Hefei in 2020. It also has plans for exporting cars to Europe and bringing its five-minute battery-swap technology there. The EV maker is even working on semi-solid-state batteries with WeLion and investing in nuclear energy.

If tensions with China continue to intensify, though, none of that will matter. Analysts worry that decoupling from China is both “impossible and dangerous.” China has responded to the latest moves by halting chip purchases from Micron Technologies (NASDAQ:MU), calling in loans made to the developing world and telling domestic investors not to buy overseas stocks.

What Happens Next?

The twin crises of the debt limit and the current confrontation with China won’t go away soon. Investors can expect a rocky ride ahead.

On the date of publication, Dana Blankenhorn held long positions in INTC and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

Article printed from InvestorPlace Media, https://investorplace.com/2023/05/is-this-pension-fund-giving-up-on-nio-stock/.

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