Chinese electric vehicle manufacturer Nio Inc – ADR (NYSE:NIO) had been in doldrums for many months, but things have started to turn around for the company. Hence, investors are probably looking forward to its first-quarter earnings report.
The company’s liquidity problems had seen NIO stock drop like a stone from $10.06 a share in February 2019 to $1.50 a share in November. However, market watchers don’t expect the company’s quarterly results to be a disaster this time, and many believe that it could, in fact, be a good time to buy the NIO stock.
Considering the fact that the company based in China, NIO has suffered from the coronavirus pandemic considerably. The supply chains suffered, and in addition to that, it had to halt production as well. Car deliveries dropped by as much as 12.8% back in February. However, the company announced that in March, the deliveries had started rising again, and that is definitely a major positive trigger for NIO going forward. In April, the delivery figures were highly impressive and recorded year on year rise of as much as 180.7%. That being said, it should be noted that the deliveries made in April are not going to be included in the first-quarter results.
There is no doubt that 2019 was a terrible year for NIO, but things are improving rapidly for the company.
On the one hand, the company has streamlined its operations, boosted margins, and also expanded its sales footprint. On the other hand, the Chinese government also provided a major boost to the electric vehicle industry but announcing that it is going to extend the subsidies for two more years. It should be remembered that the electric vehicle industry had suffered significantly last year since the Chinese government had decided to cut subsidies. In April, the car sales in China rose by 4.4% year on year, and that could point to a long term upsurge. After a year of being in the doldrums, the NIO stock could well be poised to have a better time.