Shares of Nio (NYSE: NIO), a Chinese electric vehicle company, rose in early trading this morning after it reported strong vehicle deliveries both in June and the most recent quarter.
But the stock then fell in later trading, possibly due to an analyst cutting his price target for the stock, and as new data made investors worried about a potential economic slowdown. The EV stock was down by 3.4% as of 2:12 p.m. ET.
The good news for Nio shareholders today was the fact that the company delivered 12,961 vehicles in June, an impressive 60% increase from the year-ago quarter. The company also increased second-quarter deliveries (through the end of June) by more than 14% to 25,059.
The company also said that it will start deliveries of its new ES7 SUV, as well as its ES6 and EC6 vehicles, beginning next month.
All of this was positive news for the company and helped the stock to initially pop by 3% this morning. But investors soon retreated from the stock, likely after analysts at Nomura cut Nio’s price target to $25.80, down from $51.50.
They may also be processing news today that an economic tracker used by the Federal Reserve showed that second-quarter output contracted by 1%. That decline added to the 1.6% decline of the first quarter, indicating that the U.S. may already be in a recession, according to CNBC.
Even though Nio doesn’t sell its vehicles in the U.S. right now, any potential economic slowdown here has ripple effects across the broader market. EV stocks have been particularly volatile over the past year as investors have fled riskier companies in search of safer places to put their money.
There’s likely more volatility ahead for Nio and other EV stocks. But long-term investors should be happy with the company’s strong delivery numbers and continue to keep track of how Nio’s management responds to any potential economic headwinds.