NIO stock hits an all-time low
On May 20 at 9:35 AM EST, NIO (NIO) posted a fresh all-time low of $4.11—down 7% for the day. After trading on a positive note in the first two months of 2019, the stock fell in March and April. In March and April combined, the stock lost 49.3%. During the same period, Tesla (TSLA) lost 25.4%. Let’s find out what could be driving these massive losses in NIO stock on May 20.
NIO’s US dreams are in danger
In the last few weeks, rising US-China trade tensions have taken center stage after President Trump raised tariffs on Chinese imported goods worth $200 billion. In response, China decided to raise tariffs on US imported goods worth $60 billion, which took the trade tensions between the two countries to the next level.
The ongoing trade war between the world’s two largest economies will likely hurt multinational companies from both countries.
Currently, NIO only sells its electric cars in China. Last year, the company’s former CEO in the United States, Padmasree Warrior, discussed the possibility of NIO cars coming to the US. She didn’t give a specific timeline. Warrior resigned from the position in November 2018.
Prolonged US-China trade tensions will likely hurt NIO’s US dreams. Only a positive development in trade negotiations between the two countries could help NIO stock recover sustainably in the near term.
Other Chinese stocks are also crashing
On May 20, Alibaba (BABA), which has raised its bets to expand its global market presence, was getting crushed too aggressively. The US-listed Alibaba stock fell 4.0% on May 20.