Nio's stock tanks toward a record-tying loss streak as Tesla price cuts weigh

By Tomi Kilgore

Stocks of rival China-based EV makers also keep selling off, as economic outlook is also a concern

Shares of Nio Inc. on Wednesday dove to its lowest prices seen in nearly four years, as investors in the China-based electric-vehicle maker continued to express concerns over price cuts by Tesla Inc. and a weakening economy.

The fresh lows for Nio's stock (NIO) (SG:NIO) came after Tesla reportedly cut prices on two models in China, as the Texas-based EV giant faces increasing competition. Tesla followed that move by reportedly cutting prices in Germany.

Read more: Tesla is getting beat by China's BYD on EV sales

Tesla (TSLA) generated 21.5% of its total third-quarter revenue from China, compared with 23% of its second-quarter revenue, 21% of its first-quarter revenue and 22.3% of its 2023 revenue.

Nio's U.S.-listed stock sank 2.6% in morning trading, as it headed for its lowest close since June 12, 2020.

It has tumbled 25.1% amid a nine-day losing streak, putting it in danger of tying the current record loss streak of nine sessions that ended March 9, 2020.

Besides increasing competition, the stock's weakness comes amid growing concerns over China's economy. Over the long weekend, the People's Bank of China disappointed many investors by leaving interest rates unchanged.

J.P. Morgan analysts wrote in a recent note to clients that the argument for the PBOC to cut rates was clear.

"Housing-market corrections have led to a spike in defaults by developers and spilled over to drag on debt-service ability by local government financing vehicle (LGFV) entities," analysts wrote. "Deflation pressure, weak corporate profits and weak household-income expectations also jointly call for rate cuts to reduce debt-repayment burden."

Among other China-based EV makers, shares of XPeng Inc. (XPEV) (HK:9868) dropped 3.9% toward a seven-month low and Li Auto Inc.'s stock (LI) (HK:2015) slid 4.1% toward an eight-month low.

The U.S.-listed shares of BYD Co. (BYDDY) (CN:002594) took a 4.1% hit, putting them in danger of their lowest close in 10 months.

Meanwhile, Tesla's stock slumped 3.1% toward a 10-week low. It has tumbled 18.4% over a 13-session stretch in which it has declined 11 times.

Tesla's stock, which has shed 2.6% this week, was on track to suffer a fifth straight weekly loss. That would be the longest such streak since the five-week stretch that ended in May 2021.

Meanwhile, the Global X Autonomous & Electric Vehicles ETF DRIV fell 1.9% in morning trading toward a two-month low, the iShares MSCI China ETF MCHI lost 2.9% toward a 15-month low, and the S&P 500 index SPX eased 0.5%.

-Tomi Kilgore

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01-17-24 1144ET

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