Nio (NYSE: NIO) shares fell over 3% on Friday as the European Commission (EC) announced a probe into China’s subsidies to the industry.
Reuters reported that Geely (OTCMKTS: GELYF), BYD (OTCMKTS: BYDDF), and state-controlled SAIC may face punitive tariffs as the European Commission (EC) seeks to safeguard European electric vehicle (EV) manufacturers such as Volkswagen (OTCMKTS: VWAGY). Geely already controls Sweden’s Polestar (NASDAQ: PSNY).
It’s important to note that Nio is not under investigation.
Nio stock closed the trade at $7.17 on Friday, marking a 3.11% decline from its closing price on January 11. The current market capitalization of Nio stands at around $15.20 billion.
Nio (NYSE: NIO) received a bailout from a Chinese state government amid the COVID-19 pandemic despite it is not state-controlled.
Since then, the company has been disentangling itself, considering the repurchase of factories from state-backed JAC Motors. Nio is strategically maneuvering to enhance control over its supply chain. In addition, the company has secured a substantial $2.2 billion investment from Abu Dhabi’s Public Investment Fund.
Nio is also displaying a proactive approach to exports. The company is establishing a dealer network for the Firefly, set to make its debut in 2025 with a price tag of $25,000. However, Bank of America downgraded Nio recently, citing concerns about the outlook for 2024.
European regulators are worried that an influx of Chinese electric vehicles (EVs) might adversely impact their automotive industry. A particular source of concern is BYD, which recently initiated its inaugural large-scale shipment of cars to Europe. The BYD Explorer 1 can transport a maximum of 7,000 cars per voyage.
The current scenario in Europe reveals that about half of all new car sales are electric. However, sales are expected to decelerate as consumers anticipate the availability of more affordable options such as the Nio Firefly.
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