Nio's stock hit by EU investigation into China's EV makers, while Tesla's stock rises

By Tomi Kilgore

Shares of Xpeng and Li Auto also fall while Tesla's stock gains as EU looks into subsidies China's government provides to EV makers

Shares of Nio Inc. were knocked lower Wednesday, as investors expressed concerns about the European Union's investigation into government subsidies that China-based electric vehicle makers receive.

The stock (NIO) dropped 2.3% in premarket trading, after rallying 5.3% over the previous two sessions.

Meanwhile, shares of Tesla Inc. (TSLA) gained 1.1% ahead of the open. Tesla has cut prices more than once this year to fend off competition.

The EU's investigation comes as European Commission President Ursula von der Leyen said that global markets were being flooded with electric cars made in China, which are priced artificially low because of huge state subsidies, as the Associated Press reported.

"As we do not accept this distortion from the inside in our market, we do not accept this from the outside," von der Leyen said, per the AP. "So, I can announce today that the commission is launching an anti-subsidy investigation into electric vehicles coming from China."

Among other China-based EV makers, shares of Xpeng Inc. (XPEV) slid 3.4% and Li Auto Inc.'s stock (LI) shed 2.1%.

Other stocks to watch after the opening bell include those of BYD Co. and Geely Automobile Holdings Ltd. (0175.HK), which began sales of EVs in Europe this year, the AP reported.

Nio's stock has run up 18.9% over the past three months through Tuesday, while the Global X Autonomous & Electric Vehicles ETF DRIV has lost 6.3%, the iShares MSCI China ETF MCHI has slipped 3.3% and the S&P 500 index SPX has gained 2.1%.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-13-23 0817ET

Copyright (c) 2023 Dow Jones & Company, Inc.