Categories Analysis, Consumer, U.S. Markets News

Here’s why Nio might not be a good investment at the moment

China-based premium electric carmaker Nio (NYSE: NIO) had one of the grandest Chinese stock debuts last year at the New York Stock Exchange. It was touted as a formidable international competitor to Tesla (NASDAQ: TSLA) and other electric vehicle manufacturers. However, the latest earnings report from Nio seems to have turned the table for the Chinese company.

Though the company surpassed market expectations on both the revenues and income during the quarter, vehicle sales plunged 54% hurt by a cut down in the EV subsidy and slow macro-economic conditions in China caused by the trade war with the US. The management also stated that they expect the weakness to continue into the current quarter.

nio revenue performance

Including the planned delivery of ES6 models, the company expects total deliveries in the current quarter to hit 2,800 to 3,200 units. This represents almost 20-30% decline from the prior sequential quarter. The ES6 is a high-performance premium SUV, which will be rolled off this month. The company claims to have over 12,000 pre-orders for the ES6.

In a greater-than-expected slow-down, Nio’s flagship vehicle, the ES8, saw its deliveries tumble to 3,989 vehicles from 7,980 vehicles in previous quarter.

Nio vs Tesla model 3 deliveries

The planned launch of the electric sedan, ET7, was also delayed, and market observers suspect Tesla’s aggressive marketing into the Chinese EV market to be the reason. The management is likely to focus on ES8 and ES6, before it can afford to place a new model in the highly competitive market.

Tesla had earlier this week opened its pre-orders for Model 3, which would be locally manufactured at its Shanghai Gigafactory. According to local media reports, the bookings were met with an overwhelming response, with all pre-order slots filling in just 3 minutes.

LISTEN TO: Nio Q1 2019 earnings conference call

The locally made Tesla Model 3 would cost $47,529. Earlier, the vehicles were being imported from the US, which had elevated the selling price to $54,616. In comparison, the ES8 costs about $65,000 in the Chinese market.

The Shanghai factory is cutting down Tesla’s logistical problems of launching an aggressive assault into the Chinese EV market, besides sidestepping the US-China spat.    

stock movement - nio and its peers

Tesla’s overwhelming response in Nio’s home market does not paint a bright picture for the Chinese firm, at least in the short term. China is potentially one of the largest markets of EV and the government is focused on making at least a fifth of new car sales by 2025 to be electric. Nio may be positioned to bite off a share of this market, but with more diverse product offerings, international rivals are at a much better position at the moment.

Convinced by these headwinds, Bank of America analyst had recently downgraded Nio to Underperform from Neutral, and slashed the price target to $3, from $6.20.

nio Q1 2018 earnings conference call

Listen to on-demand earnings calls and hear how management responds to analysts’ questions

Most Popular

INTU Earnings: Intuit Q3 2024 revenue and adj. profit top expectations

Intuit Inc. (NASDAQ: INTU) Thursday reported an increase in adjusted earnings and revenues for the third quarter of 2024. The results also exceeded analysts' estimates. At $6.74 billion, the Mountain

After blowout quarter, Nvidia (NVDA) looks set to continue riding the AI wave

Shares of NVIDIA Corporation (NASDAQ: NVDA) rallied this week after the semiconductor giant reported robust first-quarter numbers. Being a first mover in artificial intelligence chips, the company is spearheading the

Target Corp. (TGT): A brief look at the retailer’s performance in Q1 2024

Shares of Target Corporation (NYSE: TGT) rose over 1% on Thursday. The stock has dropped over 11% in the past one month. The company delivered mixed results for the first

Comments

  1. Pingback: Lincoln Georgis
  2. Pingback: Chirurgie Tunisie
  3. Pingback: Rota evaporators
  4. Pingback: economics degree
  5. Pingback: FUE
  6. Pingback: Family dentistry
  7. Pingback: pulleys machine
  8. Pingback: Fiverr Earn
  9. Pingback: Fiverr Earn
  10. Pingback: Fiverr Earn
  11. Pingback: Fiverr Earn
  12. Pingback: fiverrearn.com
  13. Pingback: fiverrearn.com
  14. Pingback: fiverrearn.com
  15. Pingback: clima para hoy
  16. Pingback: fiverrearn.com
  17. Pingback: fiverrearn.com
  18. Pingback: fluffy bullies
  19. Pingback: french bulldog
  20. Pingback: best mobile phone
  21. Pingback: future university
  22. Pingback: future university
  23. Pingback: future university
  24. Pingback: rtp slot gacor
  25. Pingback: Fiverr.Com
  26. Pingback: Fiverr
  27. Pingback: grey frenchie
  28. Pingback: Warranty
  29. Pingback: FUE
  30. Pingback: FUE
  31. Pingback: Office relocation
  32. Pingback: Classic Books 500
  33. Pingback: FiverrEarn
  34. Pingback: Fiverr.Com
  35. Pingback: Streamer
  36. Pingback: Sefton Playclub
  37. Pingback: partners
  38. Pingback: FiverrEarn
  39. Pingback: live sex cams
  40. Pingback: live sex cams
  41. Pingback: FiverrEarn
  42. Pingback: FiverrEarn
  43. Pingback: FiverrEarn
  44. Pingback: FiverrEarn
  45. Pingback: FiverrEarn
  46. Pingback: FiverrEarn
  47. Pingback: FiverrEarn
  48. Pingback: FiverrEarn
  49. Pingback: FiverrEarn
  50. Pingback: technology
  51. Pingback: puravive scam
  52. Pingback: cheap sex cams
  53. Pingback: live sex cams
  54. Pingback: live sex cams
  55. Pingback: live sex cams
  56. Pingback: live sex cams
  57. Pingback: rare breed-trigger
  58. Pingback: abogado fiscal
  59. Pingback: 늑대닷컴
  60. Pingback: nang delivery
  61. Pingback: allgame
  62. Pingback: 918kiss
  63. Pingback: หวย24
  64. Pingback: pg slot
  65. Pingback: AI Attorney
  66. Pingback: regles 421
  67. Pingback: catskills hotel
  68. Pingback: megagame
  69. Pingback: weight loss drops
  70. Pingback: 6mm arc ammo
  71. Pingback: sicarios madrid
  72. Pingback: itsMasum.Com
  73. Pingback: nang tanks
  74. Pingback: nangs sydney
  75. Pingback: link
  76. Pingback: itsmasum.com
Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top