Nio Inc. (NIO) stock has struggled with a two-week downturn because of the Tesla price cuts.
This article will look at the potential for a bottom in NIO stock soon.
NIO – Weekly Chart
NIO trades at $10.34 after the stock found resistance at the $14 level for the second time. The $13 level is the key for a sustained rally to take hold in the automaker.
Investors will hope for a year of recovery in 2023 for the China-based electric vehicle (EV) manufacturer. Traders ignored some weak January sales numbers, with Nio’s price-cutting strategy expected to keep the automaker competitive. Last year’s covid lockdowns didn’t make Nio’s success easier, and there were many supply-chain disruptions.
NIO can benefit from its efforts to differentiate itself from other automakers by expanding its Battery-as-a-Service (BaaS) program via its Power-Swap-Stations (PSS). NIO’s stations allow customers to pay monthly fees on top of the traditional plug-and-charge model. This is beneficial for customers as it can slash the waiting time for charging by exchanging their empty battery for a charged one. The company has over 1,300 stations in China and 10 in Europe and intends to increase the PSS to 1,700 in China and 120 in Europe by the end of the year.
NIO reported 8,506 January vehicle deliveries in the mainland, a 46% decline from December and an 11.9% drop Y/Y. This was better than some Chinese carmakers, but Tesla’s sales in China surged 76% in the second week of January compared to week one.
Tesla’s 13.5% price cuts have not been ideal for other EV makers, but NIO can stay in the game with its own 13% cuts, the Chinese reopening, and its PSS scheme. Investors should keep an eye on that $13 resistance level for a potential rally in the EV stock this year.
