I was recently looking for a shot of ISA wallet. and New (NYSE: NIO) caught my attention, given the arrow’s decrease by approximately 20 % of this year.

For four years, 92 % crashed and now trading for only $ 3.50!

NIO has a permanent problem

NIO was established in 2014, a Chinese electrical vehicle manufacturer (EV) focusing on the excellent sector, especially SUVs and sedans.

However, what distinguishes it is its SWAP stations, where drivers can exchange the battery in a few minutes instead of shipping it. NIO runs around 3354 of these stations, with the vast majority of China.

The company used to call it “Timing From China. But this title is no longer used anymore, because it has never won a profit, and the maximum of its market of $ 7.3 billion is a small part of Tesla.

Consistent NIO losses have always been late for investment. In 2024, the company achieved 221,970 cars, an increase of 38.7 % on an annual basis, which led to revenue of $ 9 billion (an increase of 18 %). However, it lost $ 3 billion, which is almost the same amount in the previous year.

In the first quarter, the company lost another $ 930 million, which was more than 30 % for the previous year. However, CFO Stanley Yu Qu tried to reassure investors: “Since the first quarter, we have implemented a set of cost control control measures, including regulatory restructuring, brand integration, improving efficiency … starting from the second quarter, the company aims to achieve structural improvements in total cost efficiency“

I got Déjà Vu, because NIO says such things for all years that I was following. However, the losses continue to come, and the share price continues to decrease.

Bruising warfare war

Another thing that prevents me is the brutal EV price war in China, the local NIO market. This does not show any signs of abandonment, and EV giant Byd The prices have recently reduced some models. The Chinese government seems to be more anxious about this industry.

Price war like Anaconda, narrowing of profit margins. In such an environment, I doubt that NIO has any real pricing power.

However, it has launched a few sub -branch brands cheaper to attract different customers. ONVO is one directed towards the family, and the ETA is the smaller EV. This may emerge in the increasingly crowded Chinese EV market.

My movement

Analysts are currently expecting a 35 % increase in revenue this year. While this is impressive at first glance, the losses will continue for years to come, according to the same expectations.

Obviously, we cannot set the NIO ratio of P/E where there are no profits. On the basis of the sale price, the double is only 0.75 times.

This may serve as a deal for generations if there is a ceasefire in the EV war in China, and the new NIO brands such as hot cakes are sold, and it finally makes a profit.

However, there is a lot of IFS for me. With only $ 3.6 billion in cash and its equivalent at the end of the first quarter, I am afraid that the company will soon need another injection of capital to keep the factory lamps.

I am weighing things, I no longer deal with NIO at $ 3.50 of what you were in 10 dollars. So I will continue to search for these potential stocks elsewhere.