Nio’s stocks have fallen to 24%, with the company’s electric vehicle sales slumping

The shares of Nio dropped by an additional 18% resulting in a 24% total loss for the last two days. This report from Tuesday’s analysis is a shock for the company after investors expecting the company to perform well with the records, they posted last year. The primary cause of this problem is the stalemate that the company is facing over the sell-off, which is also affecting its competitor Tesla. The two companies have been witnessing problems with their shares tumbling in the stock market. The leaders of the companies attribute the trend to the increase in the cost of borrowing, which has graced the industry amid the rising bond yields. Bond yields rise in prices, with investors choosing this strategy as a mechanism 5o retrieve the profits they lost in the pandemic period.

Bespoke Investment Group explained that the futuristic cash flows that were performing aggressive discounting had to rethink their strategies because they are also under duress. It seems that all utilities are attesting to this trend because of the prolonged impacts of the pandemic. The firm outlined that Nasdaq’s 100 is also operating at over 4% losses when scaled with Russell 2000’s index. This value is proof that stocks have plummeted from their original trend because of the new measures to safeguard against the pandemic.

Tesla recorded a 9% reduction in the value of its shares from the previous 5% drop. This trend is anticipated to characterize the industry for the next few days before the companies identify the strategies to beat this problem. The executives of the company explained that this situation started setting in when they halted ordering the cheap version for the company’s Model Y SUV. The company made this move over the weekend, and its effects are visible with the current stock performance. Nio also copied this move, and the results are devastating to the company.

Experts explained that companies seeking to establish themselves in the electric vehicle market should make informed decisions before copying their competitors. Nevertheless, the industry is growing rapidly, with investors pouring in more cash for electric vehicle production and green energy exploits. Tesla might have established this mechanism to retrieve the profits that it should have realized in the previous period. However, Nio should have reconsidered this move seeing that it is suffering its consequences. Hopefully, the company can regain its position in the market and learn from the mistakes it made. The investors are expecting the company to come back stronger and better than they performed in the previous quarter.

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