Chinese premium electric car-maker Nio (NYSE: NIO) stock plunged to a record low of $2.50 as concerns are mounting of Tesla’s (NASDAQ: TSLA) expanded presence in China and plan for a lower-priced Model 3 made in the country. This comes on heels after a decline in Nio ES8 deliveries for the second successive month in May.

Nio has been struggling from the cut down of electric vehicles subsidy and the trade war with the US that created slow macro-economic conditions in China. Also, the automobile market in China remained muted that raised more concerns about the future performance of Nio.

Nio ES6 electric car
Courtesy: Nio / Facebook post

Tesla has taken it seriously to outrun EV startups Nio, Weltmeister and XPeng Motors in the Chinese automobile race. Tesla, which has been building a factory in China since January, had opened its pre-orders for Model 3 that will be made locally at its Shanghai Gigafactory.

The price of the China-made Model 3 vehicles had been fixed with a starting price of CNY 328,000 ($47,529), which is 13% cheaper than the current import price. The higher-end version of the Model 3, which was priced CNY 522,000, will still be imported from the United States. Pre-orders of the vehicles have already begun during May-end and response turned out to be overwhelming.

Also, Nio has postponed its upcoming electric sedan ET7 for an indefinite period following the rough first-quarter results. However, the company has decided to build the car on an all-new technological platform in its own manufacturing facility that could push back the car’s timeline.

Also read: Here’s why Nio might not be a good investment at the moment

Meanwhile, analysts and investors continued to bet on the company sinking in the stock market due to Nio’s shrinking presence in the electric vehicle market. Traders believed that the road to recovery could require extreme moves from the company. The stock is likely to be on a downtrend in the coming months.

Majority of the analysts recommended a “hold” rating while expecting the stock to reach $7.64 per share in the next 52 weeks. Also, the current levels hinted for investors to hold on to their stocks.

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