Nio, a Chinese-based electric auto maker, recently saw their stock prices drop as the company stated that they expect this month's car deliveries to increase from June's levels after a recall hit them hard last month.
The company reported 837 July deliveries, mostly of its five-seat ES6. That was down substantially from the 1,340 reported for June. Nio’s stock (ticker: NIO), down about 50% in 2019 through its close, was off 2.4% to $3.06. The S&P 500 was down 0.5%.
The company blamed a few factors for July’s slide, including a shift toward increased battery manufacturing to meet the needs of a recall announced in June. There were bigger-picture issues, too, according to a company statement.
“Some deliveries were pushed forward into June in anticipation of further electric vehicle subsidy reductions that took effect at the end of June,” CEO William Li said in a news release. “Lastly, China’s macroeconomic and auto market conditions remained challenging, exacerbated by the U.S.-China trade conflict and the decline in passenger vehicle sales on a year-over-year basis for 13 of the past 14 months.”
Investors have been mainly down on Nio since March, though there were some signs of enthusiasm—attributed largely to second-quarter deliveries that came in above guidance and a perhaps-fleeting hint of a recovering Chinese auto market—in July.
“Having taken swift and transparent actions throughout the recall process, we are happy to report that we see users’ confidence in the safety and quality of our vehicles quickly returning,” Li said. “Looking ahead, with battery capacity allocation back to normal, we will accelerate deliveries and make up for the delivery loss impacted by the recall.”
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