CA - NIO: This Is The Inflection Point (Rating Upgrade)

2024-03-27 10:00:00 ET

Summary

• NIO's bottom-line continues to suffer due to the ongoing price war within the EV industry.
• NIO's business model is unsustainable at the current cash burn rate and the company will likely be prompted to dilute its shareholders even more to get the additional liquidity.
• NIO is unlikely to be a great long-term play, but its shares might rebound in the short-term.

NIO ( NIO ) continues to be in a tough spot as its business continues to suffer from the ongoing price war within the EV industry while its cash burn rate is not significantly improving. Even though the recent liquidity injection from third parties will ensure that the business won’t go under, it’s likely a matter of time until another injection is needed in order to properly compete with more advanced peers. ...

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