Why Tesla, Nio and Nikola shares fell today

What happened

Chinese manufacturer of electric vehicles (EV) Nio (NYSE: NIO) tries to do in his country of origin what the market leader You’re here (NASDAQ: TSLA) made in the US Nio is releasing its second quarter financial update tomorrow, just two days after the China Passenger Car Association (CPCA) revealed what Tesla produced from its Shanghai plant in July.

EV shares are both weaker during today’s trading session as investors look to the Nio report tomorrow. As of 11:45 a.m. EDT, Tesla and Nio shares were both down less than 2%. At the same time, the shares of Nicolas (NASDAQ: NKLA) were down about 2% after jumping 5.4% earlier on a new press release.

So what

Nikola broke news that likely caused the first bump, but the move didn’t hold up. The company said it has added a new partner to its planned sales and service dealer network in the northeastern United States. But the most interesting news among those names was what Tesla produced at its Shanghai plant in July and how it compared to Nio.

Tesla Model Y. Image source: Tesla.

Now what

Tesla began manufacturing its Model Y compact SUV in Shanghai in January 2021. Although it did not break down the mix between the Model Y and the Model 3 sedan, the CPCA statement says Tesla produced 32,968 vehicles. at the factory in July, as reported by Reuters.

But only about 8,600 were sold domestically, which is a 69% drop from the number of vehicles sold locally in June. Tesla exported the balance out of China.

But even Tesla’s 8,621 vehicles sold in China topped Nio’s sales by 7,931 units in July. Although Nio reported that production had been affected by the global semiconductor shortage, its July shipments still increased 125% year-over-year.

Investors are watching Nio closely to see if it can mirror Tesla’s path to become the market leader in electric vehicles. Tesla just reported a record profit in the three-month period ended June 30, making more than $ 1 billion in net profit for the first time. Like Tesla with its exclusive network of electric vehicle chargers, Nio goes beyond simply selling vehicles. It has a battery exchange network that quickly replaces electric vehicle batteries as an alternative to taking time to recharge.

Nio is also moving outside his home country, with his first shipment to Europe going to Norway last month. Another similarity is that the stock’s valuation has been pushed beyond current fundamentals. Nio has a market cap of over $ 70 billion, although he has yet to report a profit.

With Tesla valued at around 10 times that market cap, investors are hoping Nio’s stock price will mirror Tesla’s path as well. Tomorrow’s quarterly report will give them an extra data point along the way.