Shares in China-based electric vehicle maker Nio (NYSE:NIO) appeared to be on the verge of a rebound in late March, but this month, NIO stock has fallen back into a slump.

Not exactly surprising, considering that the company once again has reported underwhelming vehicle delivery numbers. Some investors continue to believe in the bull case laid out for this vehicle electrification play.

Said bull case goes as follows: while results right now may not be setting the world on fire, a few quarters from now, Nio will once again impress the market with high levels of revenue growth, and narrowing losses that signal a path towards consistent profitability.

Yet despite this confidence from bullish investors, most in the market are currently taking a “show me” approach with Nio. Inspecting the details, there’s much to suggest that you should as well.

Gauging the Latest Delivery Numbers

On April 1, Nio released its delivery numbers for the preceding month and quarter. During March, the EV maker delivered 10,378 vehicles. This represented only a 4% increase compared to the prior year’s month.

On a sequential (month-over-month) basis, this figure was even less impressive (a 15% decline). For the quarter ending March 31, the company delivered a total of 31,041 vehicles.

This represented a 20.5% increase compared to the prior year’s quarter. It’s easy to see why management highlighted this figure in the deliveries press release.

However, while deliveries jumped by double-digits on a year-over-year basis last quarter, quarterly deliveries fell by 22.5% sequentially. Nio reported total deliveries of 40,052 vehicles for the quarter ending Dec. 31, 2022.

While these results were anticipated, given that these numbers underscored the company’s current growth challenges, it was enough to take the wind out of the latest NIO stock rally.

Declining only slightly, some may believe that NIO’s drop back into the single digits is an opportunity to buy on weakness. Yet it’s not merely recent results that call the bull case into question.

At Best a Stretch Goal, at Worst Wishful Thinking

Like I discussed in my NIO stock article, it’s not only enthusiastic investors who believe that this company’s growth is just about to get back to a full charge. Nio Chief Financial Officer Steven Feng has expressed similar sentiments.

Feng was recently quoted as saying that this EV maker is “very confident” in its ability to more than double delivery volume this year, to 250,000 vehicles. However, with 20.5% growth this quarter, and a dip in sales last month, Nio clearly has its work cut out for it.

Yes, management has argued that the current Nio growth slump is transitory. Through the launch of new vehicle models, plus the proliferation of EV battery swapping stations, the company will ramp-up production and deliveries during the second half of the year.

But while this is an impressive sales target, it’s a stretch goal at best, wishful thinking at worst. The reasons for this are manifold.

An EV glut is emerging in China. Overall EV growth is slowing down, with the end of China’s EV subsidies. Also, the country’s post-Covid recovery is playing out more slowly-than-expected.

The Verdict

Don’t get me wrong. I do not believe that Nio’s growth this year will screech to a complete halt. Or worse, that the company will report a year-over-year decline in sales, and a further rise in operating losses.

Rather, with many growth challenges, actual results for the full year could fall short of current forecasts. Consensus estimates right now call for top-line growth of around 74%.

Even if the company reports vigorous growth, this may drive a further de-rating of this stock.

While the story could begin to change down the road, it remains best not to rush into a NIO stock position. The market’s current “on the fence” view is on the money.

NIO stock earns a D rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.