Nio stock price retreated in Hong Kong as investors expressed concerns about the intensifying competition in China’s electric vehicle industry. The stock dropped to a low of H$29.15, its lowest level since April 23, and 52% below the highest point in 2024.
BYD price cuts continue
Nio’s share price dropped after BYD, the biggest electric vehicle (EV) in China, announced a series of price cuts across its range. It has slashed prices of some of its models by up to 35%, a sign that demand was slowing.
For example, BYD slashed the price of the popular Seagull hatchback by 20% to $7,780, which makes it one of the cheapest EVs in the country.
Recent data shows that dealership stock levels rose to 3.5 million vehicles or 57 days, the highest level since December 2023. Soaring stock means more supply in the market, which needs to be rebalanced by high demand.
The BYD price cuts in China came a few days after two big dealerships – Xingqi Group and Qiancheng – went out of business, confirming that the industry was slowing.
Therefore, Nio stock price crashed as investors anticipated that other EV companies will start cutting prices to compete with BYD, which makes some of the most popular vehicles in the country.
The shares also dropped as the price cuts mean that demand for electric vehicles is falling in the country.
Read more: Nio stock price resilient to trade war, yet crash to $1.12 likely
Nio earnings ahead
The next important catalyst for the Nio stock price will be its quarterly results on June 3. These numbers will provide more information about its business, especially its ONVO brand and the Firefly.
A report released in April showed that Nio delivered 15,039 vehicles in March, a 26.7% increase from the same period last year. It delivered 42,094 vehicles in the first quarter, a 40.1% increase.
Most of these vehicles were its premium Nio brand, while the rest was from its ONVO brand, which delivered 4,820 vehicles.
The most recent results showed that Nio’s vehicle sales rose by 13% in the fourth quarter to $2.39 billion, while its vehicle margin grew to 13.1%. Total revenue rose to $2.6 billion during the quarter.
Analysts anticipate next week’s results to show that its revenue will be CNY 12.46 billion, up from 25% from the same quarter last year.
Nio’s annual revenue is expected to be CNY 92.46 billion this year, followed by CNY 120 billion next year.
Analysts will also watch for more information about firefly, its recently launched hatchback that will compete with BMW Mini and Mercedes Smart.
Nio’s earnings come a few months after the company raised H$4.03 billion through a share sale that led to a dilution of its shareholders.
Nio stock price technical analysis
The daily chart shows that the Nio share price has fallen in the past few days. It moved from a high of $34.25 on April 29 to the current $29.25.
The stock fell below the key support level at $31.25, its lowest point on January 15. It has also moved below the 50-day and 100-day Exponential Moving Averages (EMA).
The MACD and the Relative Strength Index (RSI) have continued falling this year. Therefore, the stock will likely continue falling as sellers target the next key support level at $23.80.
Read more: Nio stock price has crashed: is it safe to buy the dip?
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