NIO Stock Price and Forecast: Extends collapse as Chinese EV makers drop, NKLA buy opportunity eyed

NIO Stock Price and Forecast: Extends collapse as Chinese EV makers drop, NKLA buy opportunity eyed

  • NYSE:NIO drops by 10.23% as the electric vehicle industry continues to get battered.
  • NIO receives a bullish outlook from Goldman Sachs, despite the two-day correction.
  • NIO sets a new monthly record for vehicle deliveries in November.

Update: Nio Inc – ADR (NYSE: NIO) has kicked off Wednesday’s trading with a substantial decline of around 9% to just above $41 at the time of writing. While shares of the Shanghai-based electric vehicle maker is still trading high in the past month, it has completed a decline of over $15 or nearly 30% from the highs since mid-November. Nevertheless, NIo equity has been having a spectacular year, up nearly 20-fold from the 52-week low of $2.11.

The EV sector has been in focus for various reasons, one being the upcoming inclusion of Elon Musk’s Tesla (NASDAQ: TSLA) in the S&P 500 Index, an event due on December 21. Shares of the celebrity-dominated automaker seem to have sucked attention away from other contenders, yet the sector continues growing, as Nio’s latest car delivery numbers have shown. Will NIO’s current decline provide a buying opportunity? At least one other EV firm has been proving a boon after its recent slide.

The news continues to be positive for NYSE:NIO, but the association as a Chinese electric vehicle maker is enough to scare investors off. On Tuesday, the stock continued its slide as NIO lost a further 10.23% to close the trading session at $45.36 which represents a 20% discount over the last week. NIO’s rivals XPeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) also continued to tumble, based off of the fraudulent accusations against another Chinese electric vehicle maker Kandi (NASDAQ:KNDI). Once again, investor distrust of Chinese companies and their reporting structure is rearing its ugly head.

Despite its stock performance this week, it’s not all bad news for NIO. On Tuesday, the stock received a long-awaited bullish upgrade from Goldman Sachs analysts as the firm changed their stance from sell to hold. The upgrade represents a mea culpa by Goldman Sachs as it stated the new Battery Swap program as one of the things that sets Nio apart from its competition. NIO also announced that its November vehicle deliveries set another monthly record as the latest month proved to be a 109% increase year-over-year from 2019.

NIO stock news

NIO stock price chart

The current correction in NIO’s stock price could represent a nice buying opportunity for investors that remain bullish on NIO’s future outlook. The outcome of the House of Representative vote that may decide the future for Chinese companies listed on American markets could be another issue weighing on investor’s minds. Many investors could just be satisfied with the profits they have made so far this year from NIO and have chosen to move on to more stable investments.

NIO Stock Price and Forecast: Tumbles amidst more Chinese fraud allegations

  • NYSE:NIO plummets by 6.43% as Chinese and electric vehicle companies took a beating.
  • Chinese electric vehicle company Kandi is accused of fraudulent sales numbers.
  • The House of Representatives is set to vote on the future of Chinese companies on American exchanges.

NYSE: NIO has kicked off Tuesday’s trading with a downfall of around 6.5% to around $47.14 at the time of writing. The Chinese electric vehicle-maker is not the only stock in the sector to suffer, with Nikola (NASDAQ: NKLA) tumbling down by 16% while Workhorse (NASDAQ: WKHS) is weathering the storm with a drop of only 2%. Will bargain-seekers jump on any of these stocks? Not all EV stocks are made equal and some may provide bigger opportunities than others.

NYSE:NIO was among several Chinese stocks that were pummeled on Monday as reports of fraudulent activity by a rival company led to its worst sell-off in months.

The company in question at the center of the fraudulent accusations is Kandi (NASDAQ:KNDI), an industry rival to Nio, and one of several Chinese electric vehicle makers that have been on fire this year. A noted short-seller in the industry reported on Monday that Kandi has been embellishing its sales reports to lure in money from American investors. Kandi’s stock went into free-fall after the report and lost nearly 30% of its value, which of course, is exactly what a short-seller would want. Whether these claims are true or not, it seems to have hit a little too close to home for investors after similar cases with Chinese companies like Luckin Coffee. 

The future of Chinese companies being able to list on American exchanges is up in the air as the House of Representatives is currently voting on a bill that would potentially force these companies to delist in the next three years. The fraud allegations against Kandi is just another bump on the long road of mistrust between China and the United States, and while Nio investors should be safe, the reality is that these tensions very well could be coming to a head for the American government.

Credit: FX Street

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