Shares of Nio Inc. have experienced a slight dip due to growing investor concerns over the European Union's investigation into government subsidies that China-based electric vehicle makers receive. Despite a recent rally, with a 5.3% increase over the previous two sessions, the stock (NIO, +2.32%) dropped by 2.3% in premarket trading on Wednesday.
In contrast, Tesla Inc. (TSLA, -2.23%) saw a 1.1% gain ahead of the market opening. Tesla has responded to competitive pressures this year by reducing prices multiple times.
The European Commission President Ursula von der Leyen recently highlighted the flooding of global markets with inexpensive electric vehicles from China due to substantial state subsidies. As a result, the European Commission is initiating an anti-subsidy investigation into imported Chinese electric vehicles.
This investigation has specifically impacted other China-based EV manufacturers. Xpeng Inc. (XPEV, +0.92%) experienced a 3.4% slide, while Li Auto Inc.'s stock (LI, +2.88%) decreased by 2.1%.
Additional companies to keep an eye on following the market opening include BYD Co. (BYDDY, +3.16%, 002594, -0.17%) and Geely Automobile Holdings Ltd. (GELYY, +1.48%, 175, -1.52%). Both of these companies began selling electric vehicles in Europe this year.
As of Tuesday, Nio's stock has seen an impressive 18.9% increase over the past three months, while the Global X Autonomous & Electric Vehicles ETF (DRIV) has declined by 6.3%. Furthermore, the iShares MSCI China ETF (MCHI) has slipped by 3.3%, and the S&P 500 index (SPX) has gained 2.1%.