Nio's Stock Is About the Cheapest It's Ever Been. 1 Thing to Know Before You Buy.

Nio (NYSE: NIO) stock has lost a staggering 41% of its value in just the past six months and is barely 6% away from its 52-week low, as of the time of this writing.

At its current price, Nio stock is the cheapest it's ever been, trading at an only 0.8 times price-to-sales (P/S) ratio against its five-year average P/S of 2.5. That's a dirt cheap price to pay for an electric vehicle (EV) maker that's steadily growing its revenue in the world's largest EV market, China.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

But then the question is, why has Nio stock crashed despite growing its sales? That's something about Nio you must know before you buy the stock.

Why Nio stock crashed

Nio stock was enjoying a good run-up this year, gaining almost 19% through March 19 before giving up all of those gains, and then some. The EV maker released numbers for its fourth-quarter and full-year 2024 on March 21, and the number miffed investors yet again.

Although Nio's vehicle sales rose 13% year over year in Q4, its net loss surged 33%. Nio's net loss rose 8% to $3 billion in 2024, on revenue worth $9 billion.

A price war in the Chinese EV market forced Nio to cut prices of its EVs multiple times over the past couple of years or so. That, alongside car platform upgrades, high input and marketing costs, and other nonoperating items, have eaten into Nio's bottom line. And, that's the biggest reason why Nio stock has fallen so much despite a growing top line.

Nio's management, however, is trying to cut general expenses. The company has also launched its own autonomous driving chip and software to cut costs and reliance on third parties.

Meanwhile, Nio recently launched its first mass-market brand, Onvo, to expand its market in China, and will launch the second model under it in the coming months. Demand isn't a problem either -- Nio's deliveries surged 49% in the first two months of 2025.

If you're looking to buy an EV stock, I believe Nio is a top value pick now.

Should you invest $1,000 in Nio right now?

Before you buy stock in Nio, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nio wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $672,177!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of March 24, 2025

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.