Nio Stock Price Forecast: A Streak of Badluck Causing Price Drop

Summary:
• Yesterday's trading session saw Nio stock price drop by more than nine per cent. The drop was a continuation of a long-term bearish trend

Yesterday’s trading session saw Nio stock price drop by more than nine per cent. The drop was a continuation of a long-term bearish trend that has seen the stock lose over 30 per cent of its value in the past 30 days. The company has also lost 59 per cent of its value year-to-date.

The company started 2022 on a positive note, and by the month of March, they were reporting deliveries 37.5 per cent higher year over year. In the first quarter of 2022, the company had also set a record by delivering vehicles totalling 25,768 in the first quarter. The company had also started delivering their flagship sedan ET7 in the same month. By all accounts, everything was going to plan, and investors were highly optimistic about the year.

However, in April, everything started to fall apart. This included suspending production, mainly caused by their China supply being unable to deliver due to covid-19 restrictions. The company also announced plans to increase the prices of its vehicles and its battery-as-a-service program. Although the price increase has since been rescinded, the announcement likely impacted the current drop.

The month of April also confirmed the worst fear to investors that the company was not performing well. This is after announcing a slump of 29 per cent year-over-year deliveries and a 49 per cent drop sequentially. Such a huge drop results typically in a stock price drop and is likely to have caused the 20.67 drop in April.

Nio Stock Price Prediction

Normally I would use technical analysis to predict where I expect the prices of Nio to be in the next few days. However, the current drop in Nio stock price has been fueled by fundamental factors and market forces that have been majorly beyond Nio’s control. As long as these factors are still in play, I expect the price of Nio to continue with the current bearish move.

The price of Nio is also likely to fall in the coming weeks, a problem that is being felt across the electric vehicle industry. Likely, the current drop in shares has also been fueled by the rising cost of living, inflation and the Federal Reserve’s rate increase, which has resulted in low purchasing power for consumers. As a result, it is possible that we will start seeing Nio stock price trading below $12 in the next few days.

Nio Daily Chart