Is Nio Stock Worth The Risk At $4?

Core Viewpoint - Nio's stock has significantly declined due to economic concerns and competition, despite some positive delivery numbers and potential market opportunities in the Chinese EV sector [1][2][3] Group 1: Stock Performance - Nio's stock has dropped approximately 55% year-to-date, while rival Xpeng has seen a 46% decline [1] - Since early January 2021, Nio's stock has plummeted 90% from around $50 to about$4, underperforming the S&P 500, which increased by about 45% during the same period [2] - Nio's returns were -35% in 2021, -69% in 2022, and -7% in 2023, consistently lagging behind the S&P 500 [2] Group 2: Delivery and Market Position - In July, Nio delivered 20,498 vehicles, maintaining flat year-over-year deliveries and a 3% sequential decline, with total deliveries for 2024 reaching 107,924 vehicles, a 43.9% increase year-over-year [1] - In comparison, Li Auto delivered 51,000 vehicles in July, a 49.4% increase year-over-year, while Xpeng delivered 11,145 vehicles, up 1% year-over-year [1] Group 3: Market Opportunities and Challenges - The Chinese government has introduced new incentives of RMB 10,000 (approximately $1,410) for consumers replacing gasoline cars with electric vehicles, with potential for this subsidy to double [3] - Nio plans to enter the lower end of the EV market with its new sub-brand model, the Onvo L60, priced starting at RMB 219,900 (about$30,300), which is below its main brand vehicles [3] - Nio's stock trades at about $4 per share, approximately 0.8x consensus 2024 revenues, with projected revenue growth of over 20% this year and over 35% next year [3]