Much like the start of other months, electric vehicle maker Nio (NYSE:NIO) kicked off May in a big way, with the release of its delivery numbers for the preceding month. This news, however, hasn’t sparked a big rally for NIO stock.

In fact, NIO shares pulled back in the days following this release. While the stock has inched back to pre-earnings price levels, it’s clear that the market does not view this news as something that changes the story.

There is a good reason for this. While some present the numbers in the positive light as possible, a closer look reveals a key takeaway, and it’s far from a positive one.

For all the talk about a 2023 “growth resurgence,” we have still yet to see one take shape. With this, let’s see why it remains best to stay away.

NIO Stock and April Deliveries

Last Monday, Nio provided investors its delivery update for April 2023. During the month, the EV company delivered 6,668 vehicles to customers. This represented a 31.2% increase in deliveries compared to the prior year’s month.

Sounds impressive, doesn’t it? To those long and strong NIO stock, such news may sound like something that vindicates their view, and proves wrong the bearish takes from skeptics such as yours truly.

However, it’s important to note that, while up on a year-over-year basis, on a sequential, or month-over-month, basis, sales were down by a significant amount.

35.75%, to be exact, as Nio’s delivery number for March 2023 came in at 10,378. If you were not aware of this before, you may now understand why the market has reacted little to this news. Again, because it signals that the aforementioned “growth resurgence” has yet to happen.

Sure, in the deliveries report, Nio also discussed how it is ramping up production, and gearing up for a new vehicle launch. Yet while this aspect of the report suggests improvements are in store for this month, I wouldn’t say that it is a foregone conclusion. Lackluster sales could persist. Here’s how.

Growth Reacceleration Remains Under Threat

Those holding a more bullish opinion about NIO stock may be quick to point that, once again, I am prematurely writing off the company’s potential to experience high growth re-acceleration between now and the end of 2023.

But while Nio’s plans to increase output in theory could lead to a big jump in sales, growth in the coming months could stay underwhelming. Not only could this EV contender’s growth fall short of the more than 100% sales growth Nio CFO Steven Feng said that was achievable for this year.

Hitting sell-side forecasts, which call for a relatively lower level of sales growth (41.8%), may prove challenging as well.

In past articles about NIO, I have discussed many macro and industry-specific reasons for this, but the biggest one may be competition and not necessarily just from globally-dominant brands like Tesla (NASDAQ:TSLA).

Li Auto (NYSE:LI) is a good example. In contrast to Nio, Li reported very strong delivery numbers for April. Li’s premium electric SUV models could give the company a run for its money. In turn, making it difficult for Nio to sell as many of its upcoming vehicle models (the ES6 and the ES8) as currently expected.

The Verdict

Not only does the April 2023 deliveries report suggest that a sales resurgence has yet to arrive for Nio. There’s still much reason to be doubtful whether it will even play out within the next seven months.

NIO may be down massively from the loftier price levels shares traded for during 2021 and 2023, but the future remains accounted for in its valuation.

While holding steady for now, further evidence that growth reacceleration is not in the cards could sink the stock down further into the single-digits. A move down to penny stock levels (under $5 per share) may not be out of the question.

The risk/return proposition remains highly unfavorable. There’s still little indication better results are just around the corner. Avoiding NIO stock continues to be the best move for now.

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.