Nio Stock Drops After Year-End Media Meet Fails To Impress: Retail Turns Cautious

Shares of Nio, Inc. fell over 2% on Friday, on course to mark the fourth consecutive session of losses. 

In Hong Kong and Singapore, Nio’s stock dropped nearly 4% earlier in the day, reflecting a broad negative sentiment. 

The company on Thursday hosted its 2024 year-end media event in Shanghai, but that appears to have failed to impress investors, contributing to the stock’s decline.

According to Reuters, during the event, CEO William Li outlined Nio’s strategy to accelerate sales through better efficiency and cost control. 

He set a target of delivering 20,000 units of the Onvo L60 model by March next year. He also announced plans for the company’s third factory to begin production in the latter half of 2025. 

Despite these plans, Li acknowledged that the company’s growth of 30-40% over the past three years was unsatisfactory, which raised concerns.

Deliveries of Nio’s main brand models have declined sequentially over the last two months, with Onvo growth not fully compensating for the dip in Nio branded vehicles, according to CNEVpost. 

Li reportedly denied that the Onvo brand was cannibalizing the main brand’s sales, attributing the decline to a reduction in promotions by at least RMB 10,000 ($1,380).

In the third quarter, Nio missed both revenue and profit estimates due to weaker demand for its core brand, slower production ramp for Onvo, and rising operating costs. 

NIO sentiment and message volume Dec 13 as of 11:45 am ET | source: Stocktwits

Retail sentiment has turned more cautious on Stocktwits, to a ‘neutral’ score, as investors continue to digest the company’s struggles and uncertain growth trajectory.

Optimists focused on Li’s commentary about delivery targets next year.

Some bullish watchers even claimed that investing in the stock at current levels could boost returns tenfold by 2025.

However, skeptics questioned the reliability of the CEO’s statements, arguing that the company has repeatedly failed to live up to promises in the past.

Shares of Chinese EV makers surged earlier this week after China’s Politburo announced plans for “more proactive fiscal policies and moderately loose monetary policies.” 

They also drew attention last week, reporting record November deliveries, with third-quarter guidance hinting at another record in December.

Nio shares have lost more than 46% year-to-date, underscoring investor disappointment.

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