Nio's share price has been under pressure in recent months, erasing significant market value despite accelerating delivery growth. The stock has now stabilized at a key support level and is displaying a bullish technical pattern ahead of its upcoming earnings release, scheduled for Tuesday, September 1.
Nio earnings expectations
The Chinese electric vehicle maker is set to report second-quarter results that are expected to show robust revenue expansion. According to data from Yahoo Finance, analysts project revenue to surge by 75% year-over-year to 33.28 billion yuan. However, given Nio's historical tendency to beat revenue estimates, the actual figure could exceed 35 billion yuan.
Delivery numbers have been strong. In the second quarter, Nio delivered 107,658 vehicles, a nearly 50% increase from the same period last year. June deliveries jumped 62.9% to 40,597 units, and July continued the momentum with 35,934 vehicles delivered, up 71% from a year earlier.
Investors will focus on profitability metrics. The first quarter showed a net loss of over $40 million, a reversal from the fourth quarter's profit. A return to profitability or a narrower loss would likely be viewed positively by the market.
BYD's warning and industry headwinds
However, the broader Chinese EV market faces challenges. BYD, the country's largest EV manufacturer, issued a cautionary note in its recent earnings report, citing sluggish growth in the auto sector due to economic slowdown, intense competition, and rising costs for raw materials and chips that are squeezing margins.
To counter weak domestic demand, companies like Nio are increasingly focusing on exports, particularly to Southeast Asia and Europe. Some have also begun shipping to Canada, which recently reduced its EV tariffs.
Technical analysis: bullish pattern emerges
From a technical standpoint, Nio's stock has been trading below all major moving averages, indicating bearish momentum. The shares have found support at $4.37, a level last seen in February and March of the previous year. A decisive break below this level could signal further downside.
Yet, the stock has formed a bullish divergence, as the Percentage Price Oscillator (PPO) has been trending upward. Additionally, a falling wedge pattern—characterized by two descending and converging trendlines—has developed, which often precedes a bullish reversal.
If the pattern plays out, Nio shares could rebound after earnings, with traders eyeing the $5 resistance level, the highest point reached on July 31. For context on broader market conditions, see our coverage of inflation data and Nvidia's earnings and Affirm's consolidation ahead of its earnings.
As Nio prepares to report, the combination of strong delivery growth, potential profitability improvements, and a bullish technical setup could provide a catalyst for the stock, despite the industry-wide warnings from BYD.
This article is for informational purposes only and does not constitute financial advice.
