By Dhirendra Tripathi
Investing.com – Stocks and ADRs of Nio (NYSE:NIO), Xpeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) slumped Monday amid fears of Securities and Exchange Commission taking a tough stand against any Chinese company that fails to meet the audit requirements of the Holding Foreign Companies Accountable Act.
The act allows the SEC to delist and ban companies from trading on U.S. exchanges if regulators are unable to review company audits for three straight years.
Shares of Li Auto and Xpeng were down 16% and 10%, respectively, while Nio ADRs lost 8%. ADRs are U.S.-listed securities of non-U.S. companies. Their shares may or may not be listed elsewhere.
Nio, XPeng, and Li Auto are not named in the list of five companies the SEC cited last week for not meeting the audit norms, but investors fear the automakers could come in the line of fire.
Yum China, BeiGene (NASDAQ:BGNE), Zai Lab (NASDAQ:ZLAB), ACM Research (NASDAQ:ACMR) and Hutchmed are listed as companies not meeting the requirements.
All three EV companies have added listings in Hong Kong to cushion any possible U.S. regulatory action.