Why NIO Stock Has Been Down

$NIO Inc (NIO.US)$ stock was impacted over the last nine months by several issues beyond its control. These included the global shortage of semiconductors and microchips that has hurt automakers large and small. Nio has said that more than 1,000 microchips go into each of the vehicles it produces. If even one chip is missing, it can lead to a halt in production. This was the case last year when Nio was forced to stop and start production at its facilities several times.

The company missed on its delivery numbers in August and October due to the chip shortage. However, expectations are that the shortage should ease this year and that global supply chains should improve, which is positive for Nio.

Nio’s share price also got trampled last year as foreign investors stampeded out of Chinese stocks when authorities in Beijing cracked down on publicly traded companies, levying record antitrust fines and forcing some to cancel planned initial public offerings (IPOs) or delist from U.S. exchanges.

While Nio and other electric vehicle makers weren’t singled out for punishment, the actions of China’s politicians and regulators had a chilling effect on Chinese stocks listed in the U.S., with investors big and small hitting the “sell” button. However, it now appears the worst of China’s crackdown may be over. And the government in Beijing seems keen to see its domestic EV companies succeed globally.