Nio stock dropped below a crucial support level this week, reaching its lowest level since July 2025. It has dropped by 45% from its highest point last year and 38% from the year-to-date high. This crash will be in the spotlight as traders wait for its earnings on September 1.
The daily chart shows that the Nio share price has been in a strong freefall in the past few months, moving from the year-to-date high of $7 in April 17 to the current $4.36. A closer look shows that the stock has plunged below the important support level of $4.45, its lowest level in February and March this year. Moving below that level is a sign that bears have prevailed.
Nio has already moved below the 61.8% Fibonacci Retracement level of $4.92, also confirming the bearish outlook. The bull/bear power has remained in the red since August 3rd this year.
Nio has also formed a head-and-shoulders pattern, a common bearish reversal pattern. As such, there are signs that the stock will continue falling, potentially to the key support level of $4. A move below that price will point to more downside to $3.5.
Nio stock chart | Source: TradingView
The ongoing Nio stock crash is happening even as the company continues its strong growth in a difficult market. Recent numbers showed that the company sold 35,934 vehicles in July, up by 71% from a year earlier. This increase brought its year-to-date deliveries to 227,057, up by 68% from last year.
The company’s growth is happening, even as other Chinese companies are struggling. For example, BYD, the biggest Chinese auto company, delivered 419,211 vehicles, up by 21% YoY, while XPeng dropped by 5.23% to 38,027. Li Auto sold 30,468 vehicles, down a bit from what it sold last year.
Yahoo Finance data shows that the estimate is that Nio’s revenue rose by 75% to 33.2 billion yuan. This growth is expected to bring in 36.3 billion yuan in the third quarter, up by 66% YoY.
Nio is also on a path towards profitability. It already made a $40 million profit in the fourth quarter before swinging into a loss in Q1. As a result, analysts expect the full-year EPS to get to 1.17 yuan next year.
Nio has some major opportunities ahead. For one, its newly launched vehicles have become highly popular, with its flagship ES9 selling over 20,000 sales in less than 80 days. This is an important metric for a vehicle selling for more than $80k.
Another opportunity is the international market, where demand for Chinese vehicles has continued rising this year.
However, the main risk is that its competition continues rising this year. This competition is coming from companies like BYD, Li Auto, and Xpeng. Analysts have a bullish outlook on Nio, with Goldman Sachs hiking its target to $7, while Bank of America has a target of $6.80.
