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Nio (NYSE:NIO) stock is up slightly after the Chinese electric vehicle (EV) maker appointed an independent director to its board. The new board member has a background in cloud computing and engineering.
Yonggang Wen is a professor and Chair of the School of Computer Science and Engineering at Nanyang Technological University in Singapore. Wen received his PhD from the Massachusetts Institute of Technology () in 2008 and works on “applying learning-based techniques to system prototyping and performance optimization for large-scale networked computer systems.”
Computing Nio’s Chances
Wen’s appointment could mean that Nio will try to monetize its technology, including self-driving software and smartphone technology. Most EV stocks, including market leader Tesla (NASDAQ:TSLA), have been down in recent months as analysts question demand for electric vehicles.
One major problem for electric vehicles is that today’s batteries have low energy density, meaning EVs have limited range. Car makers have been trying to compensate by adding electronics and implementing self-driving technology, although true autonomous driving () is still largely in development.
In 2023, Nio launched its own smartphone and introduced self-driving features such as delivering cars to their drivers. This has not given much support to NIO stock, however, which is down 24% year-to-date ().
Nio also faces a tough domestic market and resistance to its export drive from Europe. The company has been losing $35,000 on each car that it makes and recently said that it will cut 10% of its workforce. The company is currently seeking dealers in Europe to support the launch of its mid-market “Firefly” EV.
Nio also recently said that it is still undecided on entering the U.S. market in 2025. To do that, the firm will need to support its own expensive battery-swap technology. This battery-swap system can help maintain its vehicles’ driving ranges and take a matter of minutes.
In October, Nio delivered 16,074 cars in October but trailed Chinese EV rivals Xpeng (NYSE:XPEV) and Li Auto (NASDAQ:LI).
What Happens Next?
Nio has been working to gain more control over its manufacturing process in recent months. While some InvestorPlace contributors remain bullish on NIO stock, I am not one of them.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.