NIO Plunges 7.78% on Intraday Shockwave: What's Fueling the Selloff?

Summary
• NIO’s stock plummets to $4.62, a -7.78% drop from $5.01
• Intraday range: $4.58–$4.95 with 78.9M turnover
• L90 SUV launch struggles to offset July delivery slump
The Chinese EV sector faces a perfect storm as NIO’s stock tumbles sharply amid production delays, pricing wars, and stiff competition. Despite a 20,000-unit L90 SUV production claim, investor sentiment remains fragile as Xiaomi’s SU7 surge and BYD’s slowdown amplify sector-wide uncertainty.

NIO's L90 Production Readiness Meets Sector-Wide Pressure
NIO’s -7.78% drop stems from a toxic mix of weak July deliveries (21,017 units, -2.7% YoY), sector-wide pricing wars, and underwhelming L90 SUV demand. While the company claims 20,000 L90 units are production-ready, this hasn’t translated to order momentum. Competitors like Xiaomi (30K July EVs) and BYD (341K units) dominate headlines, while NIO’s $3.15B net loss and -$1.64 EPS underscore its financial fragility. The $5 price level, a stubborn resistance, has crumbled as traders anticipate further markdowns.

EV Sector Staggers as NIO's L90 Launch Fails to Ignite Demand
The EV sector is polarized: Tesla (TSLA) rises 1.99% on AI-driven energy optimism, while NIO’s -8.38% plunge highlights structural weakness. Li Auto (-39.7% July deliveries) and BYD (first monthly decline) also struggle, but Xiaomi’s SU7 surge (30K July units) demonstrates the power of brand disruption. NIO’s L90, despite aggressive pricing, faces an uphill battle against entrenched rivals and a saturated market.

Options & ETF Playbook: NIO's Volatility Offers Strategic Entry Points
• MACD: 0.315 (bullish) vs. 0.2846 signal line
• RSI: 68.1 (neutral)
• Bollinger Bands: $3.29–$5.45 (wide range)
• 200-day MA: $4.2962 (below current price)
Key levels: $4.44 (support), $4.62 (breakout threshold). Short-term volatility favors options over ETFs. Two top options:
• NIO20250815P4.5 (Put): $4.5 strike, 8/15 expiry, 65.37% IV, 28.84% leverage ratio, -0.388 delta, -0.001853 theta, 0.7005 gamma, $40.774 turnover. High leverage and moderate delta make it ideal for a 5% downside scenario: max payoff = $0.50 (K - ST = 4.5 - 4.389)
• NIO20250815C5 (Call): $5 strike, 8/15 expiry, 71.2% IV, 15.38% leverage, 0.3109 delta, -0.0141 theta, 0.5474 gamma, $165.562 turnover. Break above $5.00 triggers 15.38% leverage payoff: max = $0.40 (ST - K = 5.20 - 5.00)
Aggressive bulls may consider NIO20250815C5 into a bounce above $4.62, while NIO20250815P4.5 offers downside protection if $4.44 breaks.

Backtest NIO Stock Performance
NIO has experienced a total of 634 days with an intraday percentage change of less than -8% since the backtest started on August 4, 2020. The 3-day win rate is 47.95%, the 10-day win rate is 48.26%, and the 30-day win rate is 42.59%. The maximum return during the backtest was 0.71% over 30 days, with a maximum return day on August 22.

NIO at Crossroads: Break Below $4.44 Could Trigger Sector-Wide Reassessment
NIO’s selloff reflects sector-wide challenges, not just company-specific issues. While the $4.44 support holds critical importance, a breakdown could force a re-rating of EV valuations. Investors should monitor Tesla’s 1.99% rise as a sector barometer and NIO’s ability to scale L90 deliveries. Aggressive bulls may consider NIO20250815C5 into a bounce above $4.62, but risk management remains key in this volatile environment.