NIO Stock Forecast: Sees a V-shaped recovery, still sheds 4.67%

Update, December 16: NIO stock price tumbled another 4.67% on Wednesday, extending the rout into the third straight day. The share price of the Electric Vehicle (EV) manufacturer slumped to fresh 14-month lows of $29.06 before witnessing a V-shaped reversal to end the day at $30.79. Intensifying global competition amongst the global EV space combined with resurfacing US-China tensions weighed heavily on NIO. Hawkish Fed’s shift towards three rate hikes next year failed to temper the Wall Street mood, which could have aided the late recovery in NIO stock price.

NYSE: NIO kicked the trading week off with a volatile session as shares traded as low as $32.90 and as high as $34.67. Shares of Nio ended up lower by 1.8% and closed the trading day at $33.64. It was another red start to the week for growth stocks as all three major indices were in the red for the entire session. The NASDAQ led the way, falling by a further 1.39%, while the Dow Jones dropped by 320 basis points. The S&P 500 retreated from its previous record highs as market weakness and higher than expected inflation numbers from last week carried over into Monday’s session. 

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Over in China, last week’s news of property company Evergrande defaulting on its debt has sent some shockwaves through the Chinese economy. This could have a trickle down effect which will affect the Chinese banking industry, which in turn would have a near-term effect on growth companies that rely on low interest loans for growth. Although Friday was a red day for the Hong Kong Stock Exchange, Monday saw the Hang Seng tech index rising higher as the Chinese government hinted at the easing of regulatory crackdowns on Chinese tech companies. 

NIO stock price

One of Nio’s largest domestic rivals Li Auto (NASDAQ: LI) has been turning heads in the largest EV market in the world. Li has increased its sales sequentially in each month, and delivered nearly 13,500 vehicles in the month of November. The secret to Li’s success? The company is more of a hybrid EV vehicle, with an ICE range extender for consumers who are anxious about the range of the battery. If for some reason the drive is unable to get to a charger in time, Li’s vehicles will switch over to a small gas tank that can carry them to their next charge.

Previous updates

Update: NYSE:NIO closed Wednesday at $30.79 per share, down 4.67%, partially trimming early losses. Wall Street started the day on the back foot ahead of the US Federal Reserve announcement, but the central bank delivered as expected, with no news being good news for stocks. US indexes turned green after the news, with the NYSE setting at 16,793.98, up 141 points in the day.

Update: Having tumbled as much as 7% at one point on Tuesday, NIO stock price managed to recover some of its losses. The shares of NIO closed at $.32.30, down 4.04% on the day. Growing competition weighed on the sentiment around NIO. CNBC News reported that automotive giant Toyota Motor is planning to invest $35 billion by 2030 for a lineup of 30 EVs. Separately, Brian Gu, president of Chinese EV peer XPeng, expressed concerns that Chinese regulators could push for the delisting of US-traded Chinese stocks. 

Update: NIO heads into the US close trading at $32.30, down 4.04% per share. Equities bounce ahead of the close, but remain in the red, as US PPI figures revived inflation-related concerns one day before the US Federal Reserve is set to reveal its monetary policy decision. The central bank is set to trim further its financial support, as per comments from Chair Jerome Powell. Despite the Omicron coronavirus variant may slow economic progress, heating inflation is forcing policymakers to act sooner than anticipated.

Update: Nio crashed another 6% on Tuesday after Toyota announced a $35 billion investment into electric vehicles. Competing against the heavyweights of the auto industry may give NIO investors more trepidation. Toyota expects to sell more than 3 million EVs by 2030. Of course, the Evergrande default continues pounding most Chinese stocks and is equally a cause for concern.

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