Nio (NYSE: NIO) shares jumped yesterday after the Chinese electric vehicle (EV) maker reported its July delivery numbers. But those gains reversed this morning after reports that one of its rivals may be teaming up with a well-known company to advance its autonomous driving technology. Nio shares dropped almost 3% on that news. But the stock subsequently recovered and was up 0.7% as of 2:50 p.m. ET.
This morning’s drop came after CNBC reported that Nio rival XPeng was teaming up with e-commerce giant Alibaba to advance technology for self-driving vehicles. The report said the two Chinese companies plan to open a computing center to develop and train software for driverless cars. XPeng will use technology from Alibaba’s cloud segment for the project.
The report comes just one day after XPeng reported delivering more EVs than Nio in July. While Nio may be a more well-known name in the Chinese market, XPeng now has cumulatively delivered nearly 220,000 EVs. That is quickly approaching the almost 228,000 Nio has shipped since delivering its first EV in June 2018. XPeng didn’t ship its first vehicle until about six months later.
XPeng has partially closed that gap by more than doubling its vehicle deliveries so far in 2022. Nio has increased its EV deliveries by just 22% year over year through July 31. But China remains the largest global automotive market. While XPeng may be a strong competitor to Nio, investors likely realize that there is room for more than one winner in China’s EV market.