NIO Stock Trading Is Confusing but the News Is Good for Tesla.
Untangling recent trading in
shares is no easy task. Shares are soaring in one market while dropping in another.
The important thing to know is that all of the recent news is positive for the Chinese electric vehicle maker, and some of it is good for
Tesla
.
Tesla stock was down, however, in early trading and one Wall Street analyst is warning about April sales volumes.
NIO has shares listed in New York and Hong Kong. The overseas-listed shares rose 7.2% in Friday trading to 40.95 Hong Kong dollars, or $5.24 each. The U.S.-listed American depositary receipts were down 1.1% in early trading at $5.34 each after rising 9.5% on Thursday.
Shares were helped Thursday by news that European regulators were delaying a decision about tariffs on Chinese EV imports.
and
stock rose 5.5% and 2.9%, respectively. U.S.-listed ADRs of the Chinese EV leader
rose 2.3%.
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Delayed tariffs are a positive for Chinese EV exporters, including NIO, but some of the Friday rise for NIO’s Hong Kong-listed shares also seems to be related to May deliveries. Chinese EV news outlets reported that NIO’s mobile website indicates the company will deliver more than 20,000 units this month.
NIO delivered 15,620 cars in April and has only delivered more than 20,000 vehicles in a month once—in July 2023. Higher deliveries signal strong demand for EVs in China. That’s good news for all EV makers.
Through April, Chinese EV makers have sold about 1.6 million all-electric vehicles in 2024, up about 9% year over year. Growth is good, but sales growth rates are slowing down. Chinese all-electric sales in 2023 grew about 20% compared with 2022.
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Investors should know NIO’s delivery result on Saturday. The company typically reports monthly numbers on the first day of a new month. Higher demand in China is good for all EV makers, including Tesla, which doesn’t report monthly or regional sales numbers.
The trading in NIO stock leaves shares pennies more expensive in the U.S. than in Hong Kong, making it difficult to call how Friday trading will turn out or figure out exactly what is driving NIO shares right now.
Investors don’t have to try too hard, though. Just remember that 20,000 units would be a good number for NIO and its industry peers in May.
Tesla stock was down 0.5% in early trading at $177.94 a share. The
and
were up 0.1% and 0.2%, respectively.
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analyst Colin Langan warned that April volumes in the U.S. look weak. “Based on available data, Tesla’s April sales are down about 21% year over year in North America, about 1% in Europe, and about 21% in China.”
That’s only one month of the quarter. For the second quarter, Wall Street projects 452,000 cars sold, up from about 387,000 delivered in the first quarter but down from 466,000 delivered in the second quarter of 2023.
Langan rates Tesla shares Sell and has a $120 price target for the stock.
On Thursday, while shares of Chinese EV makers soared, Tesla stock bobbed from gains to losses. Shares finished at $178.79, up 1.5%.
Write to Al Root at allen.root@dowjones.com
