Business

What Happened to Nio’s stock?

Nio is the best performing auto-maker out of China’s EV (electric-vehicle) startups. Created in 2014 by William Li, Lihong Qi, and Hsien Tong Cheng, it currently has four purchasable models, all electric-powered. In just one year, Nio’s stock has increased by about 1,500%. However, despite considerable growth, the stock has recently been decreasing through March.

The Nio ES8 Electric SUV (Business Insider)

Key Questions to Consider:

  1. What happened to Nio?
  2. Are other electric companies affected as well?

1: What happened to Nio?

The Tesla competitor ran into an issue that forced it to shut down one of its factories for 5 days, setting back the production of at least 500 vehicles: a global shortage of semiconductor chips. The chip shortage was thanks to COVID, and Nio wasn’t the only company affected. The shortage as a whole caused a $60 billion loss in the global auto-making industry

2: Are Other Car Companies Affected As Well?

General Motors has lost an estimated $1.5 billion to $2 billion, Ford estimated it would lose $1 billion $2.5 billion, and Honda and Nissan were to expected to sell 250,000 cars less than usual during March. 

The semiconductor chip shortage that has affected many auto-makers (CNBC)

TL; DR

  • Nio is an electric car manufacturing startup based in China, and its stock has skyrocketed in the past year, up 1,500% from last year.
  • Recently, the Chinese auto-maker shut down one of its factories due to a global semiconductor chip shortage caused by COVID’s effect on the economy, and it has affected all car manufacturers to some degree
  • Within Nio alone, the shutdown will set back the production of at least 500 vehicles
  • Larger auto-makers, such as General Motors and Honda, have also taken losses in billions of dollars and hundreds of thousands of cars due to this shortage

Sources

https://www.cnbc.com/2021/02/11/how-covid-led-to-a-60-billion-global-chip-shortage-for-automakers.html

https://www.cnbc.com/2021/03/26/chinese-ev-start-up-nio-shuts-factory-for-5-days-due-to-chip-shortage.html

Leave a Reply

%d bloggers like this: