US depositary shares of Chinese electric vehicle (EV) manufacturer Nio (NYSE:NIO) fell Thursday after the company reported its monthly delivery results for July. Those results weren’t bad, but investors wanted more.
Nio delivered about 20,500 EVs last month, marking the third straight month the company has surpassed the 20,000-unit delivery threshold. But it was still only about 2% higher than the same period a year ago. Nio closed today’s trading session down 8.3%.
Investors want more from Nio
The July delivery results also represented a slight decline from the 21,209 vehicles shipped in June. Investors are getting impatient and waiting for Nio to become profitable. They expected a continued increase in vehicle sales, but as can be seen in the chart below, results have flattened out in recent months.
Nio has still delivered about 44% more EVs in 2024 so far this year, compared to 2023. But investors were expecting 2024 to be a year of sharp increases in production and sales. After all, that’s what it takes to become profitable. That explains why the shares are down 55% so far this year.
The other thing investors have probably noticed is that Chinese EV peers Li Auto reported that deliveries in July increased by about 50% compared to July 2023. There was also an increase compared to June.
Nio stock is unlikely to gain any traction without a catalyst that pushes it toward profitability in a meaningful way. While July’s delivery results weren’t bad, they didn’t provide a noticeable boost toward that goal.
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Howard Smith has positions in Nio. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Nio Stock Crashed Today was originally published by The Motley Fool
