Nio stock might possibly further sink due to the reason that there are several additional factors at play at the moment.
Following more than 13 fold move upwards in the last year of 2020, the question arises that is this move higher over for this EV play Chinese company Nio (NYSE: NIO) already.
Nio had begun declining down in the stock market soon after they had successfully managed to reach their all-time high which was approximately $67. As of now, the drop has not been very big since the price has dropped to $55 from $67. On the other hand, there are enough reasons for it to slide further down.
Nio Stock Sliding Further Down
First of all the opportunity of getting on the base with the latest EV plays, the investors might persistently take their gains with Nio as well as parlay their profits towards new positions. Secondly. While the competition is getting tougher in the Chinese home market, the rapidly growing company of electric vehicles might fall short of the sky-high expectation of today.
Tesla (NASDAQ: TSLA) triggered the mad rush towards EV stock. Most investors hedged their bets on Nio stock in expectation of it to be ‘next Tesla’. However, the competition is increasing and the market is tough because there’s competition on all sides.
Xpeng is a well-established EV manufacturer on a global basis. In addition, there is Volkswagen and General Motors heating up the competition.
The delivery growth of Nio sales was merely 2%. The market capitalization of Nio stock at present is $85 billion. Although the revenue growth was almost 100% based on their prices, the prices are declining. Even if the growth remains over 50%, the stock might continue to slide further.