Nio Stock Remains Too Risky With Many Variables Beyond Its Control

Nio Stock Remains Too Risky With Many Variables Beyond Its Control

Shares in Chinese electric car maker Nio (NYSE:NIO) showed some signs of life in January, but that didn’t last. Following a pattern investors have become very familiar with, NIO stock has dropped 33% since January 21.
It’s down 65% in a little over a year, after hitting $10.06 on March 1, 2019. Is Nio due for a recovery, with the potential to ride the electric car wave to glory?
Maybe, in the long term. But there are a lot of things that would have to go right for Nio.

Bad News Keeps Piling on Nio

Nio was no stranger to bad news in 2019. You can check out this post for the litany of crises the company faced up until September. From there, the situation continued to deteriorate. Nio stock hasn’t taken such a beat-down without reason.
Among the more recent examples of bad news for Nio, Tesla (NASDAQ:TSLA) opened its first Gigafactory in China last fall. On December 30, the first Model 3 cars rolled off the line for delivery. Tesla now becomes a much more formidable competitor for Nio in the luxury Chinese EV market.
The coronavirus from China has had a measurable impact on Nio’s sales. The company says it delivered just 1,598 vehicles in January. That’s down 11.5% year-over-year, and a dramatic drop from the 3,170 it delivered in December.
In the latest news to rock the EV market, on Wednesday General Motors (NYSE:GM) unveiled Ultium, the company’s new modular electric platform. With a $20 billion investment, Ultium is expected to be the foundation for a new generation of GM electric vehicles.

Post a Comment