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Actions of NIO (NYSE: NIO) climbed over 10% higher out of the gate this morning after peers Xpeng and Li Auto reported better-than-expected earnings. This sent NIO’s stock over $ 50 a share as the group of “new energy” vehicle makers promises to generate higher long-term sales.
Yet as NIO prepares for its own third quarter earnings report later this month, Citron Research short seller Andrew Left says he’s ‘pulling the plug’ on electric vehicle (EV) maker and sees the shares crash to $ 25. NIO’s stock is up 1,100% since the start of the year.
An ES6 NIO rolls off the assembly line. Image source: NIO.
Citron had been one of the EV maker’s early drivers, recommending it to investors two years ago, when shares were $ 7. But the analyst today released an update saying that NIO’s stance “can never be justified by its current position in the Chinese electric vehicle market or its near-term prospects.”
The left argues that NIO is vulnerable to You’re hereof (NASDAQ: TSLA) Model Y pricing in China. While analysts thought a price of $ 56,000 to $ 73,000 for the Model Y would be problematic for NIO’s ES6 hatchback, analysts now believe Tesla could price it as low as $ 41,000, which hammers even more. the assessment of NIO compared to its rival.
Another round of electric vehicle price cuts could also seriously undermine NIO’s chances of profitability, significantly altering the trajectory of its stock price.
Tesla CEO Elon Musk praised the capacity building at his Shanghai plant that will help it reach 500,000 units this year, noting that his Chinese team’s progress was “beyond all expectations. reasonable expectations “.
Whether NIO craters are as low as Citron expects is a matter of guesswork, but Left’s call to ‘get out of NIO’ may be smart to make as Tesla ramps up production and puts more pressure on it. on the Chinese manufacturer of VE.
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