Shares of Chinese electric vehicle maker Nio (NYSE:NIO) were trading lower on Monday morning amid a broad-based sell-off driven by concerns around the heavily indebted Chinese property developer China Evergrande Group (OTC:EGRNF). Apple-converted-space”>
At 11:30 a.m. EDT, NIO‘s American depositary shares were down about 5% from Friday’s closing price.
You’ve probably heard that Evergrande is thought to be close to bankruptcy, that the Chinese government is thought to be unwilling to bail it out, and that its failure could have broad effects on stocks in China and possibly beyond.Apple-converted-space”>
Right now, it’s far from clear that an Evergrande bankruptcy will have anything like the market-rocking systemic effects that we saw after Lehman Brothers failed in 2008. But Evergrande isn’t the only Chinese property developer in danger of being swamped by debt, and investors seem genuinely concerned that — while it might not be 2008 all over again — a sectorwide collapse of China property developers could have effects far beyond the country’s real-estate market.Apple-converted-space”>
That’s why Nio is down today, but we should note that many other stocks — including those of other automakers with relatively little exposure to China — are down as well.Apple-converted-space”>
To be clear, there wasn’t any negative Nio-specific news driving the stock lower on Monday, or any news at all from the company. But there is one small update for auto investors to ponder: According to website CnEVPost, which tracks the electric vehicle industry in China, Nio now has 479 battery-swap stations up and running in the country, up from 361 as of its Aug. 12 earnings report.Apple-converted-space”>
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Fintech Zoom premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.