The stock of the Chinese electric vehicle manufacturer NIO has plummeted significantly after substantial gains in recent months. On Tuesday, the NIO stock listed on the NYSE lost 8.10 percent and closed at $6.24. On Wednesday, the downward trend continued as the stock temporarily dropped by an additional 2.88 percent to $6.06.

Behind the price drop are the EU's planned tariffs on imported electric cars from China.

Analysts had already warned against excessive optimism in September.

The EU Commission justifies the tariffs with market-distorting subsidies from Beijing, which keep the prices of Chinese electric cars artificially low. Chinese car manufacturers also benefit from cost advantages due to access to local raw materials and batteries. The Commission plans to impose tariffs of up to 45 percent on electric vehicles manufactured in China for five years starting from October 31, if no agreement is reached.

China accuses the EU of protectionism and claims that the measures are unfounded and violate World Trade Organization rules. However, Beijing has proposed that imported electric vehicles manufactured in China should be sold at a minimum price of 30,000 euros. The EU rejects this compromise, as it views not only the prices but also the subsidies granted for the production of e-cars as problematic.

The Dismantling of Market Barriers Remains Unresolved to This Day, Shaping the Biggest Trade Dispute Between Beijing and the EU in a Decade. For NIO, This Means an Uncertain Future in the European Market, as the Planned Tariffs Could Significantly Impair Sales of Affordable Vehicles.