Nio stock price forecast: delivery forecast downgrade likely

Nio ( NYSE: NIO) stock price has been in a freefall and the situation could get worse in the coming week when the company publishes its financial results. The stock plunged to $7.75 on Friday and is hovering near its lowest level in 2020. It has dropped by over 25% this year while Li Auto stock has jumped by almost 30%.

Rude wake-up call ahead

Nio share price could suffer a rude wake-up call in the coming week when it publishes its financial results. These results will come on the backdrop of the company’s weak deliveries numbers published this week.

The data showed that the company delivered just 6,155 vehicles in May, bringing the cumulative total car sold to over 333k. It was also just a decrease from what the company delivered in the same period in 2022. It sold 7,024 vehicles in that period.

Nio should be delivering more cars this year considering that China, its primary market, has reopened after last year’s Covid-zero lockdowns. As such, the fact that the number of deliveries is not growing invalidates the view that it is a growth company. 

Nio has now delivered less than 45,000 cars this year. In its recent statement, the company committed to delivering about 250k vehicles this year. This means that it should deliver over 34k vehicles per month this year. This seems to be a mirage.

The company hopes that its E-6 vehicle and ET 5 will help it reach this goal, which I believe won’t happen. Therefore, there is a likelihood that the Nio stock price will drop when the management is forced to downgrade its deliveries guidance.

Nio is facing substantial competition from companies like Tesla, BYD, and Li Auto. Li Auto is executing well and is expected to reach over 74k electric vehicles in the second quarter. BYD believes that it will sell 3 million vehicles this year.

Nio stock price forecast

My recent articles on Nio, which you can read here and here have been a bit bearish on the company. I believe that it faces more headwinds than tailwinds, especially now that China’s recovery has become a mirage. 

The daily chart shows that the Nio share price has been in a strong bearish trend in the past few months. Most recently, the shares have formed a descending triangle pattern that is shown in green. This pattern is usually a bearish sign. The shares have remained below the 25-day and 50-day exponential moving averages.

Therefore, the shares will likely have a bearish breakout in the coming days as sellers target the next psychological level at $5. It is highly risky to buy Nio stock below $10.

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