Nio fell down ~8% today and made a 52-week low on Tuesday. This adds to 20% over slide this month. This is primarily because of Tesla Price Cuts In China which Spooked the Investors.
Nio shares traded higher in December after the company launched its new ET9 sedan at its Nio Day event and unveiled its fourth-generation power swap stations. The stock also got a boost from the People's Bank of China, which said it would increase macroeconomic policy adjustments in an effort to support the economy.
However, Nio is off to a slow start in 2024. Nio shares pulled back at the start of the new year after the company announced a repurchase right notification for its 0% convertible senior notes due 2026.
This is a good buying opportunity at these price.
Along with being a potential catalyst for vehicle sales, advances for Nio's autonomous driving technologies could create opportunities to score wins in potentially massive robotaxi and autonomous shipping markets in the future.
Nio could also be making some significant moves to bolster its profitability in the near term. For starters, the company announced plans to cut approximately 10% of its workforce in November.
Subsequent reports emerged suggesting that the company could wind up laying off between 20% and 30% of its workforce. While that might raise some red flags, the potential headcount reduction was said to be focused in non-core businesses for the company. If Nio can efficiently trim its workforce, that should create a substantial positive earnings catalyst and increase the stock's chances of a breakout recovery.
What are the big risks with Nio?
As it stands, Nio continues to post large and expanding losses. The EV specialist closed out the period with cash and equivalents totaling roughly $6.2 billion, but its path to operational profitability remains speculative. The EV market is intensely competitive and could become even tougher down the line.
