NWTN stock price is doing much better than other electric vehicle (EV) companies like Tesla, Rivian, Lucid, and Nio this year. It has risen by about 1% this year and by 182% from its lowest point in 2023, giving it a market cap of more than $2.6 billion. 

NWTN has beaten other popular EV companies. Tesla is down by 33% this year and by over 50% from its all-time high. Similarly. Rivian and Lucid have all crashed harder than that as concerns about the EV industry remains.

NWTN is an EV company that most people have never heard about. It is a company that seeks to become the biggest manufacturer from the United Arab Emirates (UAE), a region with a fast-growing middle class.

The company has also made major investments in the past few months. Last year, the company entered a deal to acquire a 27% stake in Evergrande’s EV business. That deal lapsed earlier this year after Evergrande filed for bankruptcy and its CEO was detained.

Still, there are signs to be worried about NWTN and other EV companies. For one, as I have warned before, China is doing for the EV sector what it did for the steel and solar industries. It invested heavily in these industries and overproduced.

In the aftermath, this oversupply led to lower prices and pushed many companies out of business. This is happening as evidenced by the recent deliveries by these companies. BYD sold over 300k vehicles in the first quarter, a 42% crash from the same period in 2023. 

Tesla sold over 386k vehicles in that period while Li Auto delivered over 28,900 while Xpeng and Nio sold over 9,026 and 30,000 vehicles in that period. All these companies are planning to boost their deliveries in the coming year.

This trend is happening at a time when EV prices are retreating. In the US, used EV prices have tumbled by more than 32%. Brand new EVs are also crashing as companies continue with the price wars.

All this means that it will be difficult for new EV companies like NWTN to succeed. For one, many Chinese EV companies have started exporting their vehicles in the Middle East. As such, it will face substantial competition in its home market and abroad.

The most recent results revealed that NWTN is not doing well as its cash burn accelerates. It made just $583k in revenues and lost over $69 million. The low revenue figure is understandable since the firm was in the development phase.

Its balance sheet is also under strain. It ended the quarter with just $73.5 million in cash and short term investments. This means that it will need to raise more money in the next few months.

By Crispus Kanyaru

With a keen eye for market trends and a knack for translating complex financial concepts into engaging narratives, Crispus has established himself as a trusted voice in the world of finance. His work has graced the pages of esteemed publications like Benzinga, Forbes, Invezz, and Banklesstimes, reaching a diverse audience eager to navigate the ever-evolving financial landscape. Crispus's journey began with a deep curiosity about the forces shaping the global economy. This natural inquisitiveness led them to pursue a degree in finance and CPIA, equipping them with a solid foundation in financial theory and analysis. But Crispus knew that knowledge alone wasn't enough. He craved to bridge the gap between dry data and real-world experiences, to make finance accessible and relatable to everyone.

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