July thus far has been a great month for electric vehicle stocks, and Nio (NYSE:NIO) stock is no exception.

Already trending higher at the start of the month, NIO stock has kept climbing, making its way back to double-digit prices for the first time in months.

Some of the latest rally for the China-based EV maker has been driven by company-related news. However, much of it is rising bullishness for the EV industry at-large.

Strong monthly delivery numbers from several EV makers, plus news perceived to be bullish for EV sales growth in China, has further convinced investors that Nio will come along for the ride. Even so, I’m not convinced.

Instead, while conceding that the current sentiment for Nio could hold in the near-term, the most relevant facts still point to disappointment and big losses ahead for this EV stock.

NIO Stock: Latest Delivery Numbers Mixed at Best

Chances are you’ve seen recent headlines touting better-than-expected delivery numbers for major EV makers, and not only Tesla (NASDAQ:TSLA).

Several high-profile U.S. and Chinese EV contenders have also reported solid results as of late. Nio, though, is not in that category.

Sure, NIO stock did move higher after the release of Nio’s latest monthly delivery update, but was it for the right reasons?

The market focused only on the positive aspects of the update, and none on the negative aspects. For instance, during June, the company delivered a total of 10,707 vehicles.

Compared to Nio’s May delivery results (6,155 vehicles), this appeared to be a sign of massive growth re-acceleration.

Yet while sales were up on a sequential (month-over-month) basis, on a year-over-year basis, sales were down by around 17%. In short, far from “crushing it” as its rivals may be right now, for the prior month, Nio’s delivery numbers were mixed at best.

Still, I don’t assume investors will quickly come to the same conclusion. However, the view that sequential sales growth, plus strong overall demand growth for EVs, bodes well for the company can only prevail for so long.

The Bear Case Keeps Strengthening

Previously, I have discussed a possible bearish scenario for NIO stock between now and year’s end. There are two ways the company could underwhelm investors. Even if just one happen, it may lead to a big reversal for shares.

First, high competition from Tesla and local-based EV companies could hinder sales growth this quarter and next quarter.

Second, Nio’s move to slash vehicle prices, which is the result of the intensifying competition, will negatively affect vehicle margins. In turn, resulting in greater-than-expected operating losses.

Market confidence in the bull case may be growing right now. However, recently additional factors have emerged pointing to the bear case ultimately playing out. Tesla has once again cut prices for its vehicles in China.

A prominent China-based EV maker, BYD Company Limited (OTCMKTS:BYDDF), is gearing up to launch a vehicle that could leave Tesla and Nio’s respective premium midsize crossover offerings in the dust.

That’s not all. Along with the fact competitive pressures keep rising, the further threat of a price war has not gone away. As InvestorPlace’s Eddie Pan reported July 11, Chinese antitrust law has squashed an attempt to implement a “price war truce.”

Don’t End Up Stuck Holding the Bag

Since June, a bullish stance has paid off for NIO investors. However, as some of them decide to take profit, don’t be tempted to buy what they are selling. You could end up stuck holding the bag.

Monthly deliveries may not rise meaningfully over the next six months. The ongoing price war could do even greater damage to Nio’s margins. If one or both things play out, expect the stock to experience a big reversal.

Yes, there have been some developments recently that could change the story in the long run. For instance, an investment deal with Abu Dhabi, as well as an announced battery-swap partnership deal.

Unfortunately, neither of these will start to make an impact in time to prevent an increasingly likely late-year plunge.

With this, consider it best to keep avoiding NIO stock.

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.