What happened
US House Speaker Nancy Pelosi’s recent visit to Taiwan has angered Chinese leaders, and the fallout is beginning to have far-reaching implications. Chinese electric vehicle manufacturers like Nio (NIO -3.85%) could be caught in the middle. Investors aren’t waiting to hear what that might mean, however, and Nio shares continued their recent downward drift today.
What started as a positive move in the stock this week, after Nio announced July delivery figures, reversed course today. Its U.S. depositary shares were down 4.3% Friday at 12:36 p.m. ET.
So what
Nio has expanded its business in Western countries with sales beginning in Europe last year in Norway, and plans to expand to other European countries throughout 2022. Last week, the company announced a new plant in Hungary which will start operations next month. This plant will build electricity exchange stations for the European market.
Nio’s battery swap stations allow customers to reduce the upfront cost of its electric vehicles (EVs) and efficiently pay for a battery subscription. The company now has more than 1,000 exchange stations in China that exchange dead batteries with fully charged replacements within minutes.
Now what
Following Pelosi’s visit to Taiwan amid strong condemnation by the Chinese government, its leaders today said he was halting all talks with the United States on climate cooperation, among other topics.
It might not directly impact Nio and other Chinese EV makers in the near term, but its existing Chinese factory is a joint venture with a public partner. As the company strives to expand sales in Europe and possibly beyond, investors see recent developments as having potentially negative consequences.
