Speculation that Chinese electric vehicle (EV) maker Nio (NYSE:NIO) may raise after just raising sent NIO stock down in pre-market trading.
Nio dropped over 5% over the weekend. It opened this morning at just over $8 per share and a market capitalization of $15.6 billion. On Sept. 12, it was trading at over $10 per share. Nio had in cash at the end of June.
The new cash raise is still just a rumor, reported by Bloomberg.
I Need Cash Now!
Of the three biggest Chinese EV makers traded on Wall Street, Nio is the one most focused on the export market.
In its case, that means building expensive battery swap stations in target markets. A big selling point for its cars is that batteries can be changed out in just a few minutes, maintaining their range.
Chinese companies have been , and officials are looking at to stem the tide. Nio CEO William Li has called for on the issue. He notes electric vehicles are better for the environment than the gas-powered cars still made by European makers.
European Commission President Ursula von der Leyen has said state subsidies are artificially suppressing Chinese EV prices. Li said other factors are involved.
The controversy is occurring while Nio is also launching its own Android smartphone . The phone includes a button that acts as a key for the car. The phone also offers limited self-driving capabilities, so
Polestar (NASDAQ:PSNY), controlled by China’s Geely (OTCMKTS:GELYF), plans to launch a similar phone .
Nio delivered a total of in August. It is now 32% ahead of its delivery pace last year.
NIO Stock: What Happens Next?
Investors need to watch closely for the dilution caused by new stock issues and the growing tension with European regulators. But all Chinese EV companies will eventually be coming for Western markets.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
