What happened
Nio (NIO +7.18%) held a launch event today for the latest SUV addition to its EV lineup, but that wasn't what pushed the stock down by as much as 12% in early trading. As of 11:07 a.m. ET, Nio's American depositary shares were still lower by 11%.
So what
Rather, it was what Chinese peer XPeng said when it reported its first-quarter earnings today. XPeng warned investors that it sees relatively flat sequential sales for the remainder of the second quarter. That implies the company is losing market share, and Nio could be in a similar position.
NYSE: NIO
Key Data Points
Now what
Even if XPeng hits the high end of its second-quarter delivery projection, it would represent a large decrease compared to the year-ago period. And Nio has also seen a downward trend in monthly vehicle deliveries since they peaked at a record of nearly 16,000 in December 2022. Nio reported April 2023 deliveries of just 6,658 units.
That has come as overall demand for EVs in China continues to grow. Sales of battery electric vehicles are higher by about 30% year over year. Based on XPeng's report, Nio investors aren't likely to expect a sharp reversal in its declining sales trend when the company provides its first-quarter report on June 9.
Nio launched its new ES6 smart SUV today as it continues to grow its lineup, even as unit sales growth has stalled. Based on its recent sales results and today's disappointing projection from XPeng, it's likely that growing market share is going to the larger EV makers like Tesla and BYD. That is taking a toll on Nio's shares today. Shareholders now have to hope that management paints a brighter picture than XPeng looking ahead.
