Nio's stock hit hard as E.U. to charge China-based EV makers sharply higher duties

By Tomi Kilgore

The electric-vehicle company's selloff snaps a 3-day win streak in which shares soared more than 17%

Shares of electric-vehicle maker Nio Inc. pulled back sharply Friday in the wake of the European Union's decision to impose higher tariffs on EVs imported from China.

The new tariffs weren't exactly a surprise, as they were telegraphed last month and followed an eight-month investigation into how subsidies from China's government helped China-based EV makers.

But they follow sharply higher tariffs rolled out by the U.S. in May. And they come after Nio's stock (NIO) got a big boost earlier this week, after EV giant Tesla Inc. (TSLA) reported much stronger-than-expected delivery data.

Nio shar3es dropped 5.7% in afternoon trading, after they had soared 17.1% over the previous three sessions.

The Shanghai-based company said in its 2023 annual report filed in April that its business could be hurt by protectionist policies. Within the E.U., the company delivers EVs to Germany, the Netherlands, Denmark and Sweden.

Also possibly affecting Nio shares, the company said early Wednesday that Chief Financial Officer Steven Wei Feng had resigned "for personal and family reasons," effective July 5, after five years with the company. Nio promoted Yu Qu to CFO, from the previous position of senior vice president of finance.

Among other China-based EV makers, shares of Xpeng Inc. (XPEV) sank 7.3%, which put them on track for their biggest one-day selloff since they shed 7.4% on May 23.

Xpeng also said in its latest annual report that its exports could be hurt by antisubsidy moves by the E.U., as the company has stores in the Netherlands, Sweden and Denmark.

Elsewhere, Li Auto Inc.'s stock (LI) fell 1.6%, while BYD Co. Inc. shares (BYDDY) (HK:1211) bucked the weakness by gaining 0.6%.

-Tomi Kilgore

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07-05-24 1412ET

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