Nio (NYSE:NIO) stock fell despite the Chinese electric vehicle (EV) maker nearly doubling deliveries in July from June as it rolls out its ES6 model.
Nio said it delivered 20,462 vehicles during the month and over 10,000 ES6s.
The ES6 is an SUV that competes with the Li Auto (NASDAQ:LI) L9 and the Tesla (NASDAQ:TSLA) Model Y. It’s an upgrade from a model launched in 2018. Nio claimed it got 30,000 orders for the ES6 after its May launch.
NIO stock fell 2.4% overnight to open this morning, Aug. 1, at $14.86 per share, a market capitalization of about $26.5 billion. NIO stock is down around 2% in the morning’s trading.
Show Me the Profit
The “other” two luxury Chinese EV makers traded in New York also announced July deliveries. Li delivered 34,134 cars and Xpeng (NASDAQ:XPEV) delivered 11,008. XPEV stock got a brief boost recently when Xpeng announced Volkswagen (OTCMKTS:VWAGY) will buy 5% of it for $700 million and help it expand into Europe.
But investors are no longer interested in production, or even scaling. What they want to see is profit. That’s why Li is doing the best of the three aforementioned Chinese brands and why TSLA stock remains strong. BYD (OTCMKTS:BYDDF), which recently overtook Tesla in Chinese market share but is not directly traded on American exchanges, is up 45% this year and has a market cap of over $100 billion.
NIO stock is up nearly 60% on the year, with all the gain coming in July. China’s government is putting more consumer incentives into the EV space, hoping to jump-start the stalled economy.
There are also rumors Nio might tie up with Mercedes-Benz (OTCMKTS:MBGYY), but those remain unconfirmed.
NIO Stock: What Happens Next?
Nio is due to report June quarter earnings in September and analysts are expecting a loss. Until then investors must use its delivery numbers as a proxy for growth and hope that revenue turns into profit.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
