NIO Stock Forecast: Nio Inc dries up as drought hits Chinese automotive industry

NYSE:NIO fell by 0.85% during Thursday’s trading session.
A drought in the Sichuan Province of China is having an effect on the automotive industry.
EV Stocks extend declines as investors weigh Fed’s FOMC minutes.

Stocks Reporter FXStreet

NYSE:NIO slipped below the $20.00 price level on Thursday as a new headwind is providing some short-term difficulties for the Chinese EV sector. Shares of Nio dipped by a further 0.85% and closed the trading day at $19.91. Overall, stocks inched higher on Thursday as investors weighed an early morning report about housing sales dropping by 6% in July. The fall in sales likely signals a recession in the US housing market. Overall, the Dow Jones added 18 basis points, while the S&P 500 and the NASDAQ rose by 0.23% and 0.21% respectively during the session.

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A recent drought in the Sichuan Province of China has been causing some headaches for Chinese automakers. Local power grids are being strained as well as electric vehicle charging stations and Nio’s battery swap stations. There are concerns that this could have a short-term impact on automotive manufacturing as well, which is the last thing that the Chinese EV makers need after previous COVID-lockdowns. A battery plant run by Toyota and CATL has already been impacted and investors might be concerned that Nio’s production will once again be affected as well. Nio hosts its annual general meeting on August 25th.

NIO stock price

EV stocks were trending lower once again following Wednesday’s hawkish comments from the Fed. Tesla (NASDAQ:TSLA) dipped lower by 0.37%, while Rivian (NASDAQ:RIVN), Lucid (NASDAQ:LCID), and XPeng (NYSE:XPEV) were also trading in the red. Tesla’s stock split closed on Wednesday and will be official as of August 25th.

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FXStreet

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