Stock Market Today, Sept. 29: Nio Slides on Geely's 30% Stake Purchase in Battery Swap Business

Nio (NYSE:NIO), a premium smart electric vehicle (EV) maker, closed at $3.40, down 5.29%. Tuesday's slide followed reports tying pressure to Geely's (OTC:GELYF) purchased stake in Nio Power, and investors are watching November's Q3 results for margin progress.
Trading volume reached 53.8 million shares, coming in about 78% above its three-month average of 30.2 million shares. Nio IPO'd in 2018 and has fallen 48% since going public.

How the markets moved today

The S&P 500 (SNPINDEX:^GSPC) closed at 7,670, down 0.18%, while the Nasdaq Composite (NASDAQINDEX:^IXIC) closed at 26,798, down 0.09%. Among China-based battery-electric vehicle peers, Li Auto (NASDAQ:LI) closed at $11.23, down 4.10%, and XPeng (NYSE:XPEV) closed at $9.47, down 4.82%; the weakness among peers echoed pressure across automobile manufacturers focused on battery-electric vehicles and the mobility services group.

What this means for investors

At first glance, Geely's interest in Nio's leading battery swap technology business, Nio Power, seems like a vote of confidence. Geely is the majority owner of Volvo (OTC:VLVLY) Cars and the parent company of EV maker Polestar (NASDAQ:PSNY).

Nio Power is the company's battery swapping and charging business, and this transaction values it at about $2.4 billion. Nio's market cap is currently at about $8 billion, so that's a meaningful part of Nio's valuation.

Investors are still rightly focused on Nio's path to profitability. EV sales volumes have been increasing, but it still reported a net loss of about $78 million in Q2. Nio's Q3 report could be a catalyst for the stock if it reports profitability, and its Nio Power business may be a long-term advantage, too.

Howard Smith has positions in Nio. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.