Shares of Chinese electric-vehicle maker NIO (NYSE:NIO) were trading lower on Tuesday morning, amid a broad-based sell-off of technology stocks as investors continued to react to news of a potential COVID-19 vaccine.
As of 10:45 a.m. EST, NIO’s American depositary shares were down about 10.1% from Monday’s closing price.
Before we dive in, it’s important to keep this in mind: NIO, like other electric-vehicle stocks, has had a torrid run in 2020.
Through Monday, the stock was up nearly 1,000% on the year.
That run has been driven in part by fundamentals — NIO is a much healthier company now than it was in January — but much of it has been driven by intense investor interest in electric vehicles, following a spectacular run by category leader Tesla earlier in 2020.
More broadly, many technology-related stocks have had a strong year, as investors who were flush with cash, but reluctant to invest in many traditional businesses amid the COVID-19 pandemic, sought stocks with longer-term growth potential that was unlikely to be unaffected by the crisis.
It’s worth nothing that NIO was far from the only electric-vehicle stock in retreat on Tuesday morning. Also as of 10:45 a.m., Tesla was down 5.6% from Monday’s close, NIO’s domestic Chinese rivals Li Auto and Xpeng were down 10.9% and 6.8%, respectively, and U.S. electric-truck start-up Lordstown Motors was down 9.9%.
For auto investors holding NIO’s shares, the good news is that the company will report its third-quarter earnings before the market opens next Tuesday, Nov. 17. That’s good news because the report will almost certainly be a good one: NIO set a sales record and hit key milestones in its growth plan in the quarter, and its chief financial officer has hinted that cost-control measures implemented earlier this year are bearing fruit.
Will it be enough to send the stock back up? Tune in next Tuesday to find out.