After soaring to a 2023 high of over $15 per share in early August, US-listed shares of electric vehicle (EV) manufacturer Nio (NYSE: NIO) have experienced a sharp decline, nearly halving in value since then.
The steepest drop followed Nio’s announcement of $1 billion in convertible bonds, marking its most significant percentage decline since October 2022.
However, amidst this downward trend, a glimmer of hope has emerged for Nio investors, with reports suggesting that the company is exploring a substantial EV deal.
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Namely, the Shanghai, China-based car manufacturer is reportedly in discussions with auto industry giant Mercedes over a potential EV technology partnership.
NIO stock price analysis
At the time of publication, NIO shares were sitting at $8.79, down 2.77% in the past 24 hours,
The stock gained more than 7.8% over the past week, although its monthly performance remains negative at -16.5%, erasing over $3.5 billion off its market cap during that period.
NIO’s year-to-date stock market performance is also not convincing, with the company losing nearly 14% of its share value since January 1. This is in stark contrast to its EV peers like XPeng (NYSE: XPEV) and Li Auto (NASDAQ: Li) which saw double-digit gains over the same period.
Following its latest daily decline, Nio’s shares now trade just above the support level located at around $8.71. Losing that ground would pave the way for further declines toward the next important support close to the $8.3 level.
On the upside, the stock faces a resistance zone located at around $9.5, followed by a confluence resistance zone between $10 and $10.12, formed by the 200-day simple moving average (SMA) and 100-day SMA, respectively.
More on the Mercedes deal
According to a September 28 report by Reuters, Nio engaged in “exploratory talks” with Mercedes-Benz for a deal that would see the German carmaker invest in the Chinese startup in exchange for its EV technology.
The investment would give Mercedes access to Nio’s research and development capabilities, although “the talks did not get as far as discussion on details on the technology to be transferred and the potential financial investment,” the report stated.
However, Nio then reportedly contacted Mercedes with a tie-up proposal, but the EV startup met resistance from Mercedes, making such a deal highly unlikely.
When asked about it, Nio denied it held discussions with the German auto behemoth, calling the reports “untrue,” without providing further details.
Meanwhile, in a separate statement, Mercedes said there were no collaboration plans with Nio, although the company acknowledged it is in regular dialogues with various industry players, including Nio CEO William Li.
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