What happened
Shares of Chinese electric vehicle (EV) maker Nio (NIO 2.35%) dropped as much as 4% Friday morning, extending what has become a nearly two-week decline. While it gained some of today's losses back, Nio's American depositary shares were still down by 2.6% as of 11:35 a.m. ET.
So what
The decline started when the company reported its January delivery data. But Nio also just announced some positive news that highlighted the company's strategy of becoming more than just a seller of electric cars. Like sector leader Tesla, Nio has a burgeoning energy business, and it just released an update regarding those services.
Nio has differentiated itself from other global EV makers with a battery-as-a-service (BaaS) option that allows customers to lower the upfront cost of Nio's vehicles and instead pay a subscription to use Nio's power swap station network. Now the company is trying to grow its business in Europe by leveraging that power products and solutions segment.
Image source: Nio.
Now what
Nio accelerated its vehicle shipments to Europe last year to grow into several European countries. But Nio said this week that it also has joined the European Union's Horizon Europe research program. That program will provide the company funding to expand research and development of energy storage systems. Nio will leverage its battery swap stations to additionally offer power grid services to make energy systems more resilient, reliable, and efficient.
NYSE: NIO
Key Data Points
The company's European business will take time to expand, however. Investors today are rather focused on more short-term news such as Nio's struggle to delivery vehicles in January. After two consecutive months of record deliveries, the company delivered the lowest number of EVs last month since May 2022.
But for long-term investors, its growing business in Europe along with its unique power swap technology look to be more positive developments for Nio's future.
