Nio, Inc. NIO shares gained ground Wednesday, reversing course from the declines seen in the previous six sessions.
Earnings, Fatal Crash Pressure Nio Stock: The electric vehicle stock began to lose ground ahead of the earnings report released Aug. 11 after the market close.
The selling continued despite the company reporting forecast-beating headline numbers for the second quarter and issuing an upbeat guidance for the current quarter.
The weakness was exacerbated by an accident involving a Nio ES8 all-electric SUV when it was in "Navigate On Pilot" mode. The owner of the vehicle was killed in the accident. The company was later accused of tampering with potentially incriminating vehicle data logs without the permission of traffic police.
The string of losses resulted in Nio's shares losing about 16% of their market value.
Trio Of Factors Lead To Wednesday's Recovery: Ahead of Wednesday's rebound, Nio shares were trading in oversold territory. The stock held support around Wednesday's intraday low of $36.83, which cushioned any further downside.
Secondly, Nio is feeding off on the across-the-board strength seen in the EV space. Nio's domestic peers XPeng, Inc. XPEV and Li Auto, Inc. LI are all in the green.
XPeng announced Wednesday the start of a Phase 2 expansion project for the Zhaoqing smart EV manufacturing base, with the planned annual production capacity for the Zhaoqing Base to reach 200,000 units upon completion.
EV leader Tesla, Inc. TSLA had its own share of troubles following the disclosure of a regulatory probe int its own autopilot program Monday. The stock, which extended its losses amid the development, is seen snapping a three-session losing streak.
Thirdly, Nio's customers have rallied around the company amid the negative press on the fatal crash.
"We are well aware that NIO's NOP is currently an assisted driving system and not an autonomous or driverless system," a joint statement that has been signed by 500 owners said, the CnEVPost reported.
"NIO's presentation and promotion of NOP have not been confusing or misleading to us."
Related Link: 5 Key Takeaways From Nio's Q2 Earnings Call: New Models, Supply Chain Issues, Overseas Foray And More
Photo: courtesy of Nio.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
