Shares of Nio Inc. (NIO) took a significant hit in the afternoon trading on Tuesday, declining by 3.2%. This downturn puts the company on track for its lowest close since June 29, 2020, highlighting the challenges faced by the China-based electric vehicle maker. The timing of this selloff is noteworthy, coming right before Nio reports its vehicle sales for the month of October.
Longest Losing Streak Since 2022
Nio's stock has been on a downward trajectory for the past three months, experiencing a 52.4% plunge. This represents the longest losing streak that Nio has faced since the six-month decline that concluded in April 2022. Additionally, Nio is also looking at the worst three-month performance since it went through a 58.2% decline over the same period ending in October 2019.
Concerns Over Demand and Market Outlook
Multiple factors have contributed to the current decline in Nio's stock. Firstly, recent data from China revealed an unexpected contraction in manufacturing activity during October. This news has had a negative impact on Nio's market performance. Furthermore, concerns regarding demand have arisen due to pessimistic outlooks from Panasonic Holdings Corp. (PCRFY) and semiconductor manufacturers within the auto industry.
Peer Performance Comparison
Nio's China-based competitors are also set to release their October sales data on Wednesday. XPeng Inc. (XPEV) saw a 21.1% decrease in its stock value in October, although it experienced a modest gain of 3.2% in September. Li Auto Inc.'s (LI) stock has lost 5.2% this month, and has been undergoing a three-month losing streak with a total decline of 21.0%.
These market conditions pose significant challenges for Nio Inc. and its competitors alike. As the industry continues to grapple with various obstacles, it remains to be seen how these electric vehicle manufacturers will adapt and overcome these hurdles in the near future.