China-based electric vehicle manufacturer Nio (NYSE:NIO) has to deal with a struggling EV market and relentless competition from the likes of Tesla (NASDAQ:TSLA) and BYD (OTCMKTS:BYDDY). Hence, just because NIO stock is down, this doesn’t mean investors should assume it will recover in 2024.
As we assess Nio’s recovery prospects, we’ll examine the data from several press releases. The numbers will probably dissuade you from investing in Nio today, if you were considering it. And if you weren’t considering it, that’s fine because there are plenty of other assets that deserve a place in your portfolio.
NIO Stock Wasn’t a Buy at $15 or at $10
Price chasers got punished when NIO stock rallied to $15 last year; when it declined to $10, dip buyers might have thought they were getting a great deal. Now, the stock’s in the dumpster and, as always, there are dumpster divers who think they’re finding a hidden gem.
Real gems aren’t typically found in a dumpster, though. Indeed, the data strongly suggests that shares of Nio are “cheap for a reason,” as the old saying goes.
If Nio’s EV sales are slowing rapidly, then the market has no interesting reason to bid up the NIO stock price. Nio delivered 18,012 vehicles in December 2023, 10,055 vehicles in January 2024 and 8,132 vehicles in February 2024.
Going from 18,012 to 8,132 in a couple months’ time is a very rapid decline, wouldn’t you agree? So now, we’re starting to discern the “reason” when Nio’s skeptics say the shares are “cheap for a reason.” And remember, just because a stock is down, unless it’s at zero, there’s always room to keep falling.
Here’s an EV Price You Won’t Believe
In order to stay competitive and potentially increase the company’s EV sales, Nio might consider an aggressive price-reduction strategy. The last thing Nio needs to do now, really, would be to focus on building unaffordable vehicles.
Yet, Nio unveiled a super-car, called the EP9, with a price tag of $3 million. No, that’s not a misprint. We checked several different sources, and they all confirm the absurd $3 million price of the EP9.
Even in the niche Chinese super-car market, Nio has to compete with Tesla and BYD. Nio’s EP9 may feature over 1,000 horsepower, but BYD’s competing U9 super-car reportedly offers 1,300 horsepower.
You’re certainly welcome to check out all the fancy specifications of the EP9. As a prospective investor, though, consider how many people will actually be able to buy the EP9. Then, think about whether it would even be legal to drive the EP9 at full speed on the roadways.
Dumpster Diving for NIO Stock Will Only Get You Dirty
If the Nio share price is around $5 or $6, this might seem like a bargain. But then, some folks also probably thought it was a good idea to buy the stock at $15 and then at $10.
At the very least, check Nio’s declining monthly EV delivery numbers before you decide. When all is said and done, NIO stock only deserves a “D” grade and definitely isn’t your best bet right now.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
