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Nio's future might not be as bright as planned

Nio is a Chinese automobile manufacturer headquartered in Shanghai, specializing in designing and developing electric autonomous vehicles. Nio’s shares were at an impressive high of around $5 in February. Since then, Nio has struggled to raise demand for its ES8 and ES6 electric sport utility vehicles as it heavily spent funds on marketing and fancy showrooms. Not only does this take a toll on the company but the market as a whole has been sliding due to fears of the coronavirus pandemic. Recently their main competitor, Tesla, inc., poses a threat to Nio since Tesla plans to start local production near Shanghai. “We think the news puts speculation around Nio’s funding issues to bed — at least in the foreseeable future,” said Robin Zhu, an analyst at Sanford C. Bernstein Ltd. Robin Zhu upgraded NIO to a HOLD.

Watching Nio is about the smartest thing to do moving forward as the company has some hurdles to jump and obstacles to climb. All-in-all, they have a good foot in the door as they have shown reliability and innovative technology. I see Nio bouncing back in the future and showing its competitor Tesla that they mean business.

March 18, 2020

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