Shares of Chinese EV maker NIO (NYSE:NIO) (HK:9866) are under pressure today after the company announced the departure of its CFO.
CFO’s Departure
Steven Wei Feng has resigned as NIO’s CFO for personal reasons after serving the company since 2019. Interestingly, his resignation became effective today. NIO has promoted its Senior Vice President of Finance, Stanley Yu Qu, to the CFO position. Qu has been with NIO since 2016.
Robust EV Deliveries
Shareholders seem to be caught by surprise as Feng’s abrupt departure comes right after NIO reported impressive vehicle delivery numbers. The EV maker saw a massive 98.1% year-over-year increase in vehicle deliveries for June. Overall, the company’s vehicle deliveries soared by 143.9% for the second quarter.
NIO, which has yet to report a positive bottom line despite steady improvements in revenue, has seen its share price crumble by over 90% over the past three years. Investor sentiment is low, especially as competitors like Tesla (NASDAQ:TSLA) and BYD (OTC:BYDDF) (HK:1211) continue to race ahead.
New Tariffs in the E.U.
In the near term, a key challenge for NIO will be the EV tariffs in the European Union. The E.U. has imposed tariffs of up to 37.6% on imports of Chinese EVs. Chinese companies like NIO had been eyeing Europe for growth amid stiff price competition in their domestic market. While the tariff for NIO’s vehicles is pegged at about 20.8%, the company may opt for a price hike in the region later this year, according to Reuters.
Is NIO a Buy, Sell, or Hold?
Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average NIO price target of $6.19. This points to a 35.6% potential upside in the EV maker’s share price.
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