NIO Stock News: Nio changes course, closes with substantial gains

• NYSE:NIO  recovered its poise on Thursday, added 8.07%.
• More reports of surging COVID in China is scaring off investors.
• EV stocks were trading mostly lower as the sector underperformed the broader markets.

UPDATE: NIO stock changed course on Thursday and settled at $22.51, up 8.07% in the day. Stocks extended their recovery as investors felled relieved following the US Federal Reserve and the European Central Bank meeting minutes, as both central banks maintained the status quo. The absence of news is good news for market players, who fear more aggressive measures. The Dow Jones Industrial Average added 1.12%, while the S&P 500 added 55 points. The Nasdaq Composite was up 2.28%. The focus now shifts to the US Nonfarm Payroll report to be out on Friday, providing more hints on the country’s economic health. 

Previous update: NIO stock jumped 9% on Thursday after news of more Chinese government support made the rounds. NIO is now trading above $22.70 on the news. This places the share price above the past week’s sideways movement and toward the bottom end of the June 27 price action when Nio shares slumped initially due to a short report that alleged accounting abuses. The Chinese Ministry of Commerce announced new tax breaks and further credits for the domestic electric vehicle sector. The Ministry also may extend certain tax exemptions for the industry and looks to ramp up charging stations throughout the world’s largest nation. China is already the world’s biggest market for EVs, and competitors like Li Auto (LI) and Xpeng (XPEV) also saw their shares advance on the news.

NYSE:NIO fell back to the $20.00 price level on Wednesday as the Chinese EV maker searches for direction following a targeted short report last week. Shares of Nio sank by 6.09% and closed the trading session at $20.83. All three major averages rose slightly on Wednesday following Federal Reserve Chairman Jerome Powell reiterating a restrictive policy to rein in inflation in the US economy. The Dow Jones added 69 basis points, the NASDAQ gained 0.35%, and the S&P 500 rose for the third straight day after a 0.36% gain during the session.

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As reported on Tuesday, COVID-19 is once again rearing its ugly head in pockets of China. While numbers of the latest variants seem to be on the rise in many regions of the world, China’ zero-COVID policy has had a direct impact on manufacturing and industry within the country. Nio has already had its production shut down following Shanghai lockdowns earlier this year, and now a surge of cases in Anhui is threatening Nio’s Hefei production facility as well. While there has been no official word from the Anhui Province or Nio on any potential lockdowns, investors seem to be keeping their distance from Chinese EV makers for the time being.

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It was a mostly down day for the EV sector, with the exception of Rivian (NASDAQ:RIVN) which saw its stock surge by 10.4% after reaffirming full-year deliveries of 25,000 EVs. Other stocks like Tesla (NASDAQ:TSLA), XPeng (NYSE:XPEV), and Li Auto (NASDAQ:LI) were all declining, likely in sympathy with Nio as COVID cases rise in Chinese cities.