Chinese electric vehicle manufacturer NIO (NYSE: NIO) has made a name for itself over the past few years. The business came to prominence in 2020, rising over 1,100% during this period. However, the last 12 months have been more humbling for the stock, as it has plummeted 55%.

The NIO share price dropped as low as $12 in the past year. But with it currently sat at $19, is now the time to buy?

The year so far

One reason NIO has seen a fall is because of red hot inflation. Higher rates have a bad impact on the value of future earnings. And to add to this, growth stocks, a group of which NIO is a prominent member, also take a hit during volatile periods like now. This is because investors shy away from high-risk investments in search of safer places to store their cash.

Spiking inflation also leads to higher interest rates, as central banks look for ways to control the blaze. For a stock like NIO, which borrows heavily to fuel growth, this is also bad news as this debt becomes more expensive.

More specifically, the business has also seen its operations hit by supply chain issues. As China continues to grapple with Covid, NIO has seen its production come to a halt for periods this year. This will more than likely have a negative impact on NIO’s sales figures for 2022.

Wider outlook

While the firm has faced multiple pressures year-to-date, there are other factors to consider.

One of these, which is difficult to ignore when considering buying NIO shares, is its impressive growth. 2021 saw revenues increasing 122% year-on-year. And even in 2022, despite the issues mentioned above, the business has managed to post fairly strong delivery figures. As a potential buyer, this is encouraging.

However, one issue for me is competition.

This doesn’t only apply to NIO, but to all EV manufacturers. And while I believe there are plenty of opportunities within the sector, as this space continues to grow, competition will naturally heat up.

This can be seen through established manufacturer Volkswagen, which has already made headway in the industry. While Ford has also pledged a commitment to be all-electric by the end of the decade.

As governments worldwide make larger pushes towards an electric world, this competition will only become fiercer. As a result, NIO may struggle to maintain its impressive growth. There’s little doubt this would mean its share price suffering.

With this said, NIO may sustain a competitive advantage through its battery-swapping technology. The firm describes it as a “fully-automatic battery swap in just a short coffee break,” as the technology allows users to swap out their empty battery for a fresh one in the space of minutes.

Would I buy?

NIO’s growth is incredibly impressive. And with its cutting-edge technology, it may be able to stay ahead of competitors. However, I won’t be buying the stock today. Increasing competition worries me. And with concerns surrounding the Chinese economy at the moment, I don’t think now is the time to for me to dive in.

I’ll be keeping NIO on my watchlist for now. Should its share price fall in the months ahead, I may be tempted to open a small position.

The post The NIO share price continues to fall. Should I buy? appeared first on The Motley Fool UK.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Tesla (NASDAQ: TSLA) share price has had a dire 2022. Down 40% year-to-date, investor confidence surrounding the electric vehicle manufacturer has been squeezed by growing macroeconomic concerns.

However, yesterday offered a glimmer of hope as the stock rose 9%. So, is this the start of the road to recovery? And should I be buying Tesla shares today? Let’s find out.

The Tesla share price in 2022

Tesla’s trajectory over the past five years has been extraordinary. The stock has returned 845% within this period. So it’s a top performers over this timeframe. However, this year has seen a reversal of this impressive growth. One of the main reasons for this is rising inflation. Spiking rates dampen confidence in future company earnings. And with interest rates also jumping this year, these combined factors have driven the Tesla share price down.

However, yesterday saw that small revival in the stock’s price as CEO Elon Musk expanded on a statement he’d made earlier this month about cutting Tesla’s workforce. The firm had been expected to lay off 10% of its salaried employees. And while this will still be the case, Musk said yesterday that Tesla will continue to hire hourly workers. As a result, the layoffs will now add up to just 3.5% of the workforce. With investors clearly happy about this news, the stock jumped.

Other factors

While the above is clearly good news, I still have some concerns.

First, the major issue I have with Tesla is its high valuation. With a current price-to-earnings (P/E) ratio of 98, I think Tesla is overvalued. For comparison, rival General Motors has a P/E of just 5.44. And this puts me off when I think about adding Tesla shares to my portfolio.

Another issue I have is competition. Although Tesla is an established manufacturer, as rival firms make the inevitable transition into the EV space, it may struggle to hold on to its market-leading position. This threat can already be seen with Ford, which recently made a pledge to be all-electric by 2030.

However, Tesla is still in a strong position. Despite supply chain issues, the firm managed to produce over 305,000 vehicles and deliver 310,000 of them in Q1. On top of this, revenues also increased 87% year-on-year for the period. Given the tough conditions Tesla has faced, these results show the strength of the business.

What also excites me is the opening of its gigafactory in Berlin. This move will allow the company to expand into Europe, with the factory able to produce 500,000 vehicles every year. Should the firm keep up this strong growth, I’d expect this to lead to a rise in the Tesla share price.

Should I buy?

Tesla’s growth has been impressive. And the announcement by Musk yesterday could be the start of the stock’s revival. However, I won’t be buying Tesla shares today. The firm faces too many challenges for me. And with competition set to heat up, I’m going to hold off buying for the time being.

The post The Tesla share price rose 9% yesterday! Should I buy? appeared first on The Motley Fool UK.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

NIO (NYSE: NIO) stock made a name for itself in 2020. Rising a meteoric 1,400% during this time, since then momentum has slowed. 2022 has seen the share price drop 50%. While the last 12 months have seen over 60% shaved off its share price.

So, does this fall present an opportunity for me? And is it time for me to be adding NIO stock to my portfolio? Let’s take a look.

Why is NIO stock down?

There are multiple reasons why NIO has taken a hit. One of these is the combination of rising inflation along with spiking interest rates. While higher inflation impacts the value of future earnings, rising interest rates make borrowing money and paying off debts more difficult. For a growth stock such as NIO, this spells bad news.

As well as this, the firm has also struggled with supply chain issues. In April the firm announced the suspension of vehicle production due to rising Covid cases in China. While the business was relatively quick to begin production again, I’d expect the suspension to negatively reflect on NIO’s revenues this year.

Is it time to buy?

While NIO is facing some issues, there are still reasons to be bullish on the firm.

For example, it has seen impressive growth over the last few years. In 2021, revenues increased 122% year-on-year. And while it has struggled this year, it clearly still has growth potential. When considering buying shares, growth like this is hard to ignore.

The company also trades on a price-to-sales (P/S) ratio of just 4.84, which looks cheap. For comparison, competitor Tesla currently trades on a P/S ratio of 12.12.

However, a concern for me that I have with all-electric vehicle stocks is competition. As this space continues to expand, NIO may struggle to retain its market position. For example, competitors like Ford have already made headway in the EV sector. And with its pledge to be all-electric by 2030, along with its $1 billion Cologne site transformation, NIO may struggle to keep up with more established businesses. Should this be the case, we would most certainly see a drop in the NIO share price.

Another threat to NIO comes in the form of delisting. With the real threat of the stock being removed from the US exchange due to pressure from within China, I think we could see the share price continue to fall as a result.

So, while NIO offers potential through its strong growth, there are too many concerns for me to deem the stock a buy for my portfolio. I think worsening economic conditions will continue to mean the stock suffers. And as more competitors venture into the EV space, it may see its market share negatively impacted. Although the stock is trading considerably lower than it has in recent years, I won’t be buying shares today.

The post NIO stock is down 50%! Is it time to buy? appeared first on The Motley Fool UK.

More reading

• Is NIO stock the next Tesla?
• Jim Cramer is bullish on NIO stock at $5! Should I buy it for my ISA?

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

After a meteoric rise in 2020, the NIO (NYSE: NIO) share price has slumped 57% since then, with the stock currently down over 20% year-to-date. However, yesterday saw the Chinese electric vehicle (EV) manufacturer’s share price spike 8% amid the reveal of a new SUV, set for release in April.

So, with the stock currently trading at a slither of its all-time high, is now the time for me to capitalise by adding NIO to my portfolio? Let’s take a look.

Why did NIO rise?

Let’s begin by looking at why the NIO share price spiked yesterday. This was the unveiling of a new medium-sized SUV, officially named the ES7, announced by Qin Lihong, president and co-founder, on Tuesday. Positioned between the ES6 and ES8, the ES7 is based on the firm’s NT2.0 platform, an electric driving system equipped with nearly 20 assisted driving functions. And, with its release reflecting NIO’s continuous expansion, investors clearly took a liking to this news.

Further, if this release follows in the footsteps of NIO’s impressive delivery figures, then it could provide a boost for the firm. Its latest delivery data showed that January deliveries for 2022 represented a 33% year-on-year increase. This was the equivalent of nearly 10,000 vehicles delivered. As a potential investor, these are all positive signs.

NIO share price concerns

However, there are a few issues I see with NIO. One of these is the regulatory pressure it faces within China. The ride-sharing company Didi Global recently delisted from the American markets amid pressure from the Chinese government. And there is the potential this could happen to NIO.

A further concern for me regarding NIO is rising interest rates. As my fellow Fool Dylan Hood highlighted, inflation data came in at 7.5% year-on-year for January in the US. The Federal Reserve is expected to raise interest rates in March. The picture is also similar in the UK, where rates have already begun to rise.

This is an issue for NIO for a few reasons. Firstly, in uncertain times like these, investors tend to switch their money to more stable value stocks, meaning growth stocks (such as NIO) are the hardest hit. It also means the debt NIO has will become harder to pay off, potentially stunting growth.

As the EV market continues to grow, there is also the issue of competition. While NIO has seen large growth since its IPO back in 2018, as more established manufacturers venture into the space, the firm may struggle to compete. A prime example of this is Ford, which recently vowed to be all-electric by 2030. As these firms potentially gain market share, this could have negative connotations for the NIO share price.

What I’m doing

So, while I think NIO’s potential is clear through its impressive delivery numbers, too many issues currently surround the stock. The continuing pressure being applied by regulators provides a constant threat for it. And rising interest rates will load further problems onto the EV maker. I don’t currently hold any shares of NIO, and due to these pressures. I won’t be looking to add any in the near future either.

The post The NIO share price rose 8% yesterday! Here’s what I’m doing appeared first on The Motley Fool UK.

More reading

• Is NIO stock the next Tesla?
• Jim Cramer is bullish on NIO stock at $5! Should I buy it for my ISA?

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Tesla share price is up nearly 30% year-to-date. And, after reaching the $1,000 mark it now finds itself hovering around $930. So, with a new year upon us, what will 2022 have in store for the EV stock? Let’s take a look.

Tesla share price so far

Compared to the near 700% rise we witnessed last year, 2021 has represented a slowing down in the growth of the Tesla share price. The stock entered the year trading for $730 and got off to a strong start – up 15% by the turn of January. However, these gains were cancelled out as February saw 14% skimmed off the share price. This fall continued from March to mid-May. However, since then we have seen a slow and steady rise.

Towards the end of the year, the Tesla share price rocketed. Late October saw it surge above the $1,000 mark – making the EV firm only the sixth US company to hit a market capitalisation of over $1trn. Yet, after hitting a 52-week high of $1,243, the stock has fallen off.

So, where next?

Well, this depends on a few factors. One reason I think the Tesla share price could thrive in 2022 is that the firm is set to continue with its impressive growth. Tesla is set to launch its much-anticipated electric truck, along with the opening of new factories. Profits are expected to rise 40% for the year, while the firm is expected to sell over 1.5m vehicles. If these predictions are met, a rise in the Tesla share price is more than likely.

However, one concern for me is competition. As my colleague Stuart Blair highlighted, as the sector continues to grow, more and more manufacturers will venture over to the EV space. This includes Ford, which aims to move all-electric by 2030. It further includes Toyota, which recently announced it would be investing $35bn into EV production. This could impact the large grip Tesla currently has on market share, negatively impacting the stock’s price.

Should I buy?

It’s clear to see Tesla has the potential to prosper in 2022. The EV pioneer is on track to continue with its impressive growth, be it through new vehicle models or factory expansion. Based on this, I would be keen to buy Tesla stock. However, what is of major concern to me is the competition it will face in 2022. While Tesla currently enjoys domination over the EV sector, it is unclear how much of a threat more established vehicle manufacturers will pose as they venture into Tesla’s territory. Due to this, while I like Tesla, I intend to keep it on my watchlist for the time being.

The post Where will the Tesla share price go in 2022? appeared first on The Motley Fool UK.

More reading

• SpaceX’s IPO threatens to leave the Tesla share price on the forecourt
• Why is Tesla stock down 30% since late 2025?
• Prediction: by 2029, £5,000 invested in Tesla stock could be worth…
• Is NIO stock the next Tesla?
• Could AI bring on the mother of all stock market crashes?

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.