Why Shares of Chinese electrical car maker Nio (NIO 0.44%) were tumbling today?

Shares of Chinese electrical auto makerĀ nio stock forecast (NIO 0.44%) were rolling this morning on seemingly no company-specific news. Rather, investors may be responding to information from the other day that some parts of China were experiencing a surge in COVID-19 situations.

Much more lockdowns in the nation might once again reduce the firm’s automobile production as it has in the recent past. Therefore, investors pushed the electric vehicle (EV) stock down 6.6% as of 10:59 a.m. ET.

CNBC reported yesterday that the variety of cities in China that have actually applied COVID-related limitations has actually doubled. One of the areas is a district called Anhui, where Nio has a manufacturing facility.

Nio reported its second-quarter car shipments late last week, with quarterly car deliveries up 14% year over year as well as June shipment raising 60%. Part of that growth was aided partly due to the fact that pandemic restrictions were alleviated during that period.

China has an extremely stringent “zero-COVID” plan that restricts motion by people and also has led to manufacturing facilities for Nio, as well as various other EV manufacturers, halting lorry manufacturing.

Nio investors have actually gotten on a wild flight recently as they process rising cost of living information, increasing concerns of a global economic crisis, as well as rising coronavirus instances in China. And also with the most current information that some parts of China are experiencing new lockdowns, it’s most likely that the volatility Nio’s stock has actually experienced lately isn’t ended up just yet.

Nio investors must maintain a close eye on any kind of new growths about any short-lived manufacturing facility shutdowns or if there’s any type of indication from the Chinese government that it’s downsizing on constraints.

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