Nio stock price on 12/28/2022We have seen Chinese EV stocks such as Nio, Xpeng, and Li Auto decline in a downtrend that started at the beginning of 2021. Six months ago, it was assumed that the downtrend would surely come to an end soon due to the stocks having sold off so low. However, the stock prices are generally even lower today, and still, things don’t look good. In fact, they haven’t looked worse.

With Tesla falling to $109 from $387, there are still asset managers suggesting Tesla isn’t done falling yet. The reason? Demand in China is declining. Tesla is the leading EV company in China and if its demand is declining, you can only assume the same will soon be announced for Nio, Xpeng, and Li Auto. Making matters worse, only now has China let Covid loose throughout the country, and there are many uncertainties surrounding how the economy will look in a few months.

Of the three leading Chinese EV companies, it is Nio we like the most. Nio appears to have found a bottom at around $10, but I don’t know how long that will last. The technicals suggest Nio could easily fall to $7.89 from here if it breaks $9.53. If Nio does drop to $7.89 and the situation in China has more clarity, it would become a great buying opportunity. What you want to look for is how the population is handling Covid over the next few months. But fundamentally, since Tesla is the leading EV company, you will need to see it find a bottom before it would be wise to believe in any of its competitors.