Down 60%, Is Nio Stock Finally a Buy?
With its share price down by a whopping 60% over the last 12 months, Nio (NYSE: NIO) has dramatically underperformed the S&P 500 index, which has fallen by a much milder 9% in the same time frame. The automaker is reeling from a tightening macroeconomic environment and possible softening demand in the EV industry. But is this an opportunity for daring investors to buy the dip, or should they stay far away?
Based in Shanghai, NIO is a Chinese electric automaker that entered the U.S. markets through an initial public offering (IPO) in 2018. The company has several potential advantages. China is, by far, the biggest EV market in the world, responsible for two-thirds of global sales. And its government aims to make EVs represent 40% of vehicles sold in the country by 2030 through tax breaks, subsidies, and other incentives.
Nio will have to compete with rivals such as Tesla (NASDAQ: TSLA), which is also betting on the Chinese market. But the company seeks to differentiate itself through a business model called battery-as-a-service (BaaS).
Source Fool.com
