China is the largest automotive market in the world and has been an early adopter of electric vehicles (EVs). But competition is growing, and one Wall Street analyst thinks that could make it more painful for investors in Chinese EV maker (NYSE: NIO).

Macquarie Equity Research analyst Eugene Hsiao isn't bullish on Nio's stock, but he does think it has dropped too far. He rates it "neutral" but sees share prices getting back to $5 over the next 12 months. That would be a gain of 30% for investors from its recent level.

The stock has dropped as EV demand has slowed in China and elsewhere. Nio shares are down by nearly 60% so far this year. Investors have fretted that the timing of the demand drop doesn't bode well for smaller EV makers like Nio just as competitive offerings are increasing.

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Source Fool.com