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Jher
2023-07-15

Long term and ignore the fud.

Nio Stock Bulls are in for a Rude Awakening

As some recent company-specific developments will fail to have enough of an impact on time to prevent an increasingly-likely late-year price plunge, consider it best to keep avoiding NIO stock.

Nio Stock Bulls are in for a Rude Awakening

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However, much of it is rising bullishness for the EV industry at-large.</p><p>Strong monthly delivery numbers from several EV makers, plus news perceived to be bullish for EV sales growth in China, has further convinced investors that Nio will come along for the ride. Even so, I’m not convinced.</p><p>Instead, while conceding that the current sentiment for Nio could hold in the near-term, the most relevant facts still point to disappointment and big losses ahead for this EV stock.</p><h2 id=\"id_3690066754\">NIO Stock: Latest Delivery Numbers Mixed at Best</h2><p>Chances are you’ve seen recent headlines touting better-than-expected delivery numbers for major EV makers, and not only <strong>Tesla</strong> (NASDAQ:<strong>TSLA</strong>).</p><p>Several high-profile U.S. and Chinese EV contenders have also reported solid results as of late. Nio, though, is not in that category.</p><p>Sure, NIO stock did move higher after the release of Nio’s latest monthly delivery update, but was it for the right reasons?</p><p>The market focused only on the positive aspects of the update, and none on the negative aspects. For instance, during June, the company delivered a total of 10,707 vehicles.</p><p>Compared to Nio’s May delivery results (6,155 vehicles), this appeared to be a sign of massive growth re-acceleration.</p><p>Yet while sales were up on a sequential (month-over-month) basis, on a year-over-year basis, sales were down by around 17%. In short, far from “crushing it” as its rivals may be right now, for the prior month, Nio’s delivery numbers were mixed at best.</p><p>Still, I don’t assume investors will quickly come to the same conclusion. However, the view that sequential sales growth, plus strong overall demand growth for EVs, bodes well for the company can only prevail for so long.</p><h2 id=\"id_2226961907\">The Bear Case Keeps Strengthening</h2><p>Previously, I have discussed a possible bearish scenario for NIO stock between now and year’s end. There are two ways the company could underwhelm investors. Even if just one happen, it may lead to a big reversal for shares.</p><p>First, high competition from Tesla and local-based EV companies could hinder sales growth this quarter and next quarter.</p><p>Second, Nio’s move to slash vehicle prices, which is the result of the intensifying competition, will negatively affect vehicle margins. In turn, resulting in greater-than-expected operating losses.</p><p>Market confidence in the bull case may be growing right now. However, recently additional factors have emerged pointing to the bear case ultimately playing out. Tesla has once again cut prices for its vehicles in China.</p><p>A prominent China-based EV maker, <strong>BYD Company Limited</strong> (OTCMKTS:<strong>BYDDF</strong>), is gearing up to launch a vehicle that could leave Tesla and Nio’s respective premium midsize crossover offerings in the dust.</p><p>That’s not all. Along with the fact competitive pressures keep rising, the further threat of a price war has not gone away. As <em>InvestorPlace’s</em> Eddie Pan reported July 11, Chinese antitrust law has squashed an attempt to implement a “price war truce.”</p><h2 id=\"id_2341501353\">Don’t End Up Stuck Holding the Bag</h2><p>Since June, a bullish stance has paid off for NIO investors. However, as some of them decide to take profit, don’t be tempted to buy what they are selling. You could end up stuck holding the bag.</p><p>Monthly deliveries may not rise meaningfully over the next six months. The ongoing price war could do even greater damage to Nio’s margins. If one or both things play out, expect the stock to experience a big reversal.</p><p>Yes, there have been some developments recently that could change the story in the long run. For instance, an investment deal with Abu Dhabi, as well as an announced battery-swap partnership deal.</p><p>Unfortunately, neither of these will start to make an impact in time to prevent an increasingly likely late-year plunge.</p><p>With this, consider it best to keep avoiding NIO stock.</p><p>NIO stock earns a D rating in <em>Portfolio Grader</em>.</p></body></html>","source":"investorplace_stock_picks","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nio Stock Bulls are in for a Rude Awakening</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNio Stock Bulls are in for a Rude Awakening\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-07-15 09:09 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://investorplace.com/market360/2023/07/nio-stock-bulls-are-in-for-a-rude-awakening/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nio’s (NIO) latest delivery numbers were mixed at best, but general excitement about EV sales growth has propelled shares higher.While shares could stay on their current trajectory in the near-term, ...</p>\n\n<a href=\"https://investorplace.com/market360/2023/07/nio-stock-bulls-are-in-for-a-rude-awakening/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"NIO.SI":"蔚来","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","BK4099":"汽车制造商","BK4511":"特斯拉概念","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","BK4548":"巴美列捷福持仓","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","BK6125":"汽车制造商","LU0708995583.HKD":"TEMPLETON CHINA \"A\" (HKD) ACC","TSLA":"特斯拉","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","LU0056508442.USD":"贝莱德世界科技基金A2","BK4532":"文艺复兴科技持仓","BK4531":"中概回港概念","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","LU0234572021.USD":"高盛美国核心股票组合Acc","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","NIO":"蔚来","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4555":"新能源车","LU2063271972.USD":"富兰克林创新领域基金","BK4509":"腾讯概念","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0097036916.USD":"贝莱德美国增长A2 USD","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","EVS.SI":"MSCI China Electric Vehicles and Future Mobility ETF-NikkoAM","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","BK4550":"红杉资本持仓","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","09866":"蔚来-SW","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU1548497426.USD":"安联环球人工智能AT Acc","LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","LU0052750758.USD":"富兰克林中国基金A Acc","BK4551":"寇图资本持仓","LU0320764599.SGD":"FTIF - Templeton China A Acc SGD","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD"},"source_url":"https://investorplace.com/market360/2023/07/nio-stock-bulls-are-in-for-a-rude-awakening/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2351237276","content_text":"Nio’s (NIO) latest delivery numbers were mixed at best, but general excitement about EV sales growth has propelled shares higher.While shares could stay on their current trajectory in the near-term, investors may be in for a rude awakening later this year.As before, there remains a strong chance Nio disappoints with sales growth and/or margins in the coming quarters.Source: Michael Vi / Shutterstock.comJuly thus far has been a great month for electric vehicle stocks, and Nio (NYSE:NIO) stock is no exception.Already trending higher at the start of the month, NIO stock has kept climbing, making its way back to double-digit prices for the first time in months.Some of the latest rally for the China-based EV maker has been driven by company-related news. However, much of it is rising bullishness for the EV industry at-large.Strong monthly delivery numbers from several EV makers, plus news perceived to be bullish for EV sales growth in China, has further convinced investors that Nio will come along for the ride. Even so, I’m not convinced.Instead, while conceding that the current sentiment for Nio could hold in the near-term, the most relevant facts still point to disappointment and big losses ahead for this EV stock.NIO Stock: Latest Delivery Numbers Mixed at BestChances are you’ve seen recent headlines touting better-than-expected delivery numbers for major EV makers, and not only Tesla (NASDAQ:TSLA).Several high-profile U.S. and Chinese EV contenders have also reported solid results as of late. Nio, though, is not in that category.Sure, NIO stock did move higher after the release of Nio’s latest monthly delivery update, but was it for the right reasons?The market focused only on the positive aspects of the update, and none on the negative aspects. For instance, during June, the company delivered a total of 10,707 vehicles.Compared to Nio’s May delivery results (6,155 vehicles), this appeared to be a sign of massive growth re-acceleration.Yet while sales were up on a sequential (month-over-month) basis, on a year-over-year basis, sales were down by around 17%. In short, far from “crushing it” as its rivals may be right now, for the prior month, Nio’s delivery numbers were mixed at best.Still, I don’t assume investors will quickly come to the same conclusion. However, the view that sequential sales growth, plus strong overall demand growth for EVs, bodes well for the company can only prevail for so long.The Bear Case Keeps StrengtheningPreviously, I have discussed a possible bearish scenario for NIO stock between now and year’s end. There are two ways the company could underwhelm investors. Even if just one happen, it may lead to a big reversal for shares.First, high competition from Tesla and local-based EV companies could hinder sales growth this quarter and next quarter.Second, Nio’s move to slash vehicle prices, which is the result of the intensifying competition, will negatively affect vehicle margins. In turn, resulting in greater-than-expected operating losses.Market confidence in the bull case may be growing right now. However, recently additional factors have emerged pointing to the bear case ultimately playing out. Tesla has once again cut prices for its vehicles in China.A prominent China-based EV maker, BYD Company Limited (OTCMKTS:BYDDF), is gearing up to launch a vehicle that could leave Tesla and Nio’s respective premium midsize crossover offerings in the dust.That’s not all. Along with the fact competitive pressures keep rising, the further threat of a price war has not gone away. As InvestorPlace’s Eddie Pan reported July 11, Chinese antitrust law has squashed an attempt to implement a “price war truce.”Don’t End Up Stuck Holding the BagSince June, a bullish stance has paid off for NIO investors. However, as some of them decide to take profit, don’t be tempted to buy what they are selling. You could end up stuck holding the bag.Monthly deliveries may not rise meaningfully over the next six months. The ongoing price war could do even greater damage to Nio’s margins. If one or both things play out, expect the stock to experience a big reversal.Yes, there have been some developments recently that could change the story in the long run. For instance, an investment deal with Abu Dhabi, as well as an announced battery-swap partnership deal.Unfortunately, neither of these will start to make an impact in time to prevent an increasingly likely late-year plunge.With this, consider it best to keep avoiding NIO stock.NIO stock earns a D rating in Portfolio Grader.","news_type":1},"isVote":1,"tweetType":1,"viewCount":478,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":24,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}