Nio Inc. (NYSE: NIO) stock price has plummeted to its lowest level since 2020, following disappointing earnings results that fell short of analysts’ expectations. The Chinese electric vehicle (EV) maker’s shares crashed to $3.75 on Friday, marking a staggering 52% drop from its September 2024 peak of $7.72. This steep decline has erased $7.2 billion in market value, reducing Nio’s market cap from $14.68 billion to $7.48 billion.
Nio’s Stock Hits Multi-Year Low
Nio shares have been in freefall over the past several months, significantly underperforming rival Chinese EV companies such as XPeng, Li Auto, and BYD. The latest drop pushed the stock below the critical support level of $4—a threshold it had previously tested but failed to break in January and February.
The stock is now hovering at $3.75, just above its neckline support of $3.68. If it falls below this level, technical analysis indicates that the stock could face further downside pressure, potentially sinking to $3 or even $2.50 in the coming months.
Bearish Technical Indicators Signal More Pain Ahead
From a technical perspective, Nio’s stock is firmly in bearish territory. The share price has plunged below both the 50-day and 100-day Exponential Moving Averages (EMA), a clear signal that bears are in control.
Additionally, Nio appears to have formed a bearish head and shoulders pattern on the daily chart. The head of the pattern is at $7.72, while the right shoulder is positioned around $5.50. The neckline is now at $3.68, which the stock is dangerously close to breaking.
If this bearish pattern plays out, a confirmed breakdown below the $3.68 support level could trigger a fresh wave of selling pressure. The next downside targets would be $3 and then $2.50, representing potential multi-year lows.
What Is Driving Nio’s Collapse?
The primary catalyst behind Nio’s stock slump is its disappointing financial performance. The company’s recent quarterly results missed analysts’ estimates, raising concerns about slowing growth and intensifying competition in China’s EV market.
Despite heavy investments in new models and battery-swapping technology, Nio continues to struggle with profitability. Its shrinking margins and rising operational expenses have weighed heavily on investor sentiment.
Additionally, the broader sell-off in the EV sector, driven by concerns over weakening demand and pricing pressures, has exacerbated Nio’s decline. While competitors like BYD and XPeng have fared better, Nio’s deteriorating financials and technical weakness have made it one of the worst-performing EV stocks in recent months.
Key Levels to Watch
Traders and investors will be closely monitoring Nio’s ability to hold the $3.68 support level. A decisive break below this point could pave the way for further losses.
On the flip side, any rebound toward the $4 level would face heavy resistance, as the stock previously struggled to hold above this level. For bulls, a sustained move above $4 would be required to signal any meaningful recovery.
Conclusion
Nio’s stock is facing intense downward pressure after missing earnings estimates, with its market cap shrinking by over $7 billion. The bearish technical setup and deteriorating fundamentals suggest the stock could face further downside if it breaks below the $3.68 support level.
As competition in the Chinese EV sector heats up and Nio struggles with financial headwinds, investors will need to weigh the risks carefully. While the stock’s sharp decline may attract some bargain hunters, the prevailing bearish momentum indicates that caution is warranted.
