4 Reasons to be cautious about investing in NIO - InvestorPlace
$NIO Inc(NIO.US$ $Tesla(TSLA.US$ $BYD COMPANY(01211.HK$ $XPeng(XPEV.US$ The article reported that NIO is posting significant losses, with last year’s total bottom line EPS number coming in at -$1.70 per share. With a stock price that’s now below $5 per share, this is a company that certainly provides a high-risk, high-potential option for investors to consider. Here are 4 reasons to be cautious about this stock:
1) Nio battery-swapping tech partnerships success isn’t guaranteed because of high costs and alternative fast-charging methods. Developing battery-swap technology involves substantial R&D expenses.
2) President Joe Biden also raised tariffs on Chinese EVs from 25% to 100%. This has made it harder for Nio to plan out their strategies for the North American market. Nio’s CEO criticized the move as “unreasonable,” but it’s unlikely to prompt policy changes. Similar tariffs from the EU may further hinder Nio’s expansion plans.
2) President Joe Biden also raised tariffs on Chinese EVs from 25% to 100%. This has made it harder for Nio to plan out their strategies for the North American market. Nio’s CEO criticized the move as “unreasonable,” but it’s unlikely to prompt policy changes. Similar tariffs from the EU may further hinder Nio’s expansion plans.
3) As investors are always hyped for EV manufacturers like Nio because of its potential, its stock has been failing to deliver the numbers. NIO stock has seen a double-digit decline this year, which appears to have momentum to the downside. With gross margins deteriorating and geopolitical challenges mounting, the picture is murky for this company, to say the least.
4) In 2023, the company lost over $2,000 per unit delivered compared to 2022’s numbers. Monthly deliveries were still below projected numbers despite a great record in May. However, based on these projections, Nio could still incur losses in the longer term.
My Take: Despite a few shouted "buy more at dip" and "hold for long term", high debt and profitability concerns suggest NIO is a risky investment with uncertain returns even for longer term. According to Market Watch, the share price is negative for 1-month .(-15.46%), 3-months (-13.14%), YTD (51.16%), 1-year (51.16%) and 5-years (73.99%) meaning no matter when you buy the share you are incurring loss - the longer you hold the higher is the loss.
4) In 2023, the company lost over $2,000 per unit delivered compared to 2022’s numbers. Monthly deliveries were still below projected numbers despite a great record in May. However, based on these projections, Nio could still incur losses in the longer term.
My Take: Despite a few shouted "buy more at dip" and "hold for long term", high debt and profitability concerns suggest NIO is a risky investment with uncertain returns even for longer term. According to Market Watch, the share price is negative for 1-month .(-15.46%), 3-months (-13.14%), YTD (51.16%), 1-year (51.16%) and 5-years (73.99%) meaning no matter when you buy the share you are incurring loss - the longer you hold the higher is the loss.
Source:
$BYD COMPANY(01211.HK$ $BYD Co.(BYDDF.US$ $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$ $Tesla(TSLA.US$ $VOLKSWAGEN A G(VWAGY.US$ $NIO Inc(NIO.US$ $Li Auto(LI.US$ $XPeng(XPEV.US$ $General Motors(GM.US$ $Ford Motor(F.US$ $Rivian Automotive(RIVN.US$ $MERCEDES-BENZ GROUP AG(MBGAF.US$ $TOYOTA MOTOR CORP(TOYOF.US$ $GEELY AUTO(00175.HK$ $Stellantis NV(STLA.US$
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I reflected trading experiences by writing journals. My comments are for educational purposes not financial advice.
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AnaiAnai : ya. murky.
J L 7 2 : That's right, it's true that Ah Dou, who is damn muddy and can't support the wall, has huge losses
ZnWC OP 103255950 : This is what someone said last month, last 3 months, YTD, last year and last 5 years. The stock just keeps going down.
ZnWC OP 103255950 : See my last sentence.