Usman Salis
⬤ NIO is approaching its Q3 earnings release next Tuesday while trading in a technical zone that lines up with the completion of a corrective Wave C structure. The stock currently sits near $5.58, positioned between the 0.5 Fibonacci retracement at $5.51 and the 0.618 level at $4.92. Consensus estimates point to an EPS of roughly -$0.23, equal to a $320 to $340 million net loss. Any result better than a $380 million loss, or EPS above -$0.27, would be seen as progress toward NIO's stated goal of reaching non-GAAP breakeven in Q4.
⬤ The chart shows a broader Elliott Wave sequence, with Wave (1) peaking earlier in the cycle and the ongoing Wave (2) testing deeper retracement levels. The technical setup shows potential Wave C exhaustion happening right into the earnings date—a point that often brings higher confluence for reversals. The plotted projection outlines a possible advance toward the 1.618 extension at $13.65 if momentum shifts. Vehicle margin expansion remains the primary metric to watch, given its importance to NIO's near-term profitability path.
⬤ Valuation dynamics within the China EV landscape are also worth noting. NIO trades near 0.9 times forward price-to-sales, significantly lower than Li Auto at approximately 2.6 and XPeng between 3 and 3.5. Despite operating in the same rapidly expanding EV market, NIO's valuation looks heavily compressed compared to peers. The industry's move away from weekly delivery reports has hidden underlying monthly strength, which could become clearer if Q3 results beat expectations or if Q4 guidance signals improving operational momentum.
⬤ This setup matters because the convergence of major technical support, a key earnings catalyst, and divergent valuation creates a moment of heightened focus for the China EV sector. If NIO delivers narrower losses alongside constructive forward guidance, the alignment of these factors could shift broader sentiment toward growth-focused electric vehicle manufacturers heading into 2025.
Usman Salis
