5 Auto Companies Facing Worst Declines Amid Global Chip Shortage

4. NIO Inc. (NYSE:NIO)

Number of Hedge Fund Holders: 34  

NIO Inc. (NYSE:NIO) is a China-based company that engages in the development and marketing of electric vehicles. It is placed fourth on our list of 10 auto companies facing the worst declines amid global chip shortage. In early September, the company posted delivery numbers for the month of August, reporting deliveries of 5,880 vehicles in August, down from 7,931 cars in July. The firm blamed “uncertainty and volatility of semiconductor supply” as the main reason behind the drop. 

On August 12, investment advisory Bank of America maintained a Buy rating on NIO Inc. (NYSE:NIO) stock with a price target of $62, raising the 2022 volume forecasts for the firm and appreciated the “solid” third quarter guidance of the firm. 

At the end of the second quarter of 2021, 34 hedge funds in the database of Insider Monkey held stakes worth $2 billion in NIO Inc. (NYSE:NIO), up from 28 in the preceding quarter worth $1.3 billion.

In its Q2 2020 investor letter, McLain Capital, an asset management firm, highlighted a few stocks and NIO Inc. (NYSE:NIO) was one of them. Here is what the fund said:

“Nio, Inc. (NIO): It’s stock up 360% since the beginning of June on no news, and one of our more troublesome short positions, the Chinese electric vehicle manufacturer is valued at a whopping $17bln on trailing revenue of only $1.1bln. In 2019, the business ran a -17% gross margin, a -140% EBITDA margin & burned ~$1.5bln in cash in 2019. The stock has become one of the most popular stocks among retail traders with approximately 250,000 accounts holding the name just on the popular Robinhood trading platform.”