Since the start of the year, shares in China-based electric vehicle maker Nio (NYSE:NIO) have surged by more than 30%. NIO stock tumbled during 2022, due to both souring sentiment for EV stocks and concerns about the impact of China’s Covid-19 lockdown policies on its near-term operating performance.

But now, with China ending its lockdowns and U.S. investors becoming less concerned about macroeconomic issues, enthusiasm for the stock has returned in a big way. Not only that, many analysts are confident that shares will continue to zoom higher.

That said, while the situation in its home market may be improving, this may not necessarily translate into a big comeback for the stock. Considering a bevy of factors, Nio’s performance during the rest of 2023 could underwhelm.

Why There’s Renewed Buzz Surrounding NIO Stock

Besides shifting market sentiment, recent news has also had a positive impact on Nio’s stock price performance. For instance, Nio’s December delivery numbers. Delivering 15,815 vehicles, the EV maker hit a new monthly all-time high in terms of delivery volume. Deliveries were also up a staggering 50.8% compared to the prior year’s quarter.

Alongside this news, the company also announced that it was expanding its partnership with its battery supplier, Contemporary Amperex Technology. Investors in NIO stock have reacted positively to this development, as it may result in more efficient and longer-lasting batteries for Nio’s vehicles.

On top of these more recent news items, excitement is growing regarding Nio’s upcoming vehicle releases. These include the EC7 electric SUV coupe, as well as a new version of its existing ES8 full-size electric SUV. Both were unveiled at Nio Day 2022, which was held in December.

In light of all this, the market believes that Nio is ready to reenter the fast lane. In turn, this would enable shares to zoom back to $20 per share and above. Again though, there are several reasons that this scenario fails to play out in 2023.

What May Hit the Brakes on a Further Rebound

Sell-side analyst forecasts vary, but Nio’s 2023 revenue is expected to experience a high double-digit percentage increase. Such reacceleration in growth would certainly provide another major boost for NIO stock. So, why am I skeptical this will happen?

For starters, December’s strong delivery numbers may have been the product of a one-time factor. With China’s EV subsidies phasing out at the end of 2022, there may have been a rush to get orders completed before this deadline. As InvestorPlace analyst Louis Navellier recently pointed out, Nio CEO William Li last month warned investors of “sales challenges” in the near term.

I’ll admit that the company has a stronger chance of living up to its promises of growth reacceleration later this year, in contrast to what happened last year. Unlike in 2022, Covid-19 headwinds are easing, and China’s economic growth is expected to rebound for the full year 2023.

Even so, continued economic challenges could affect Nio’s international expansion efforts in Europe. There’s also another factor that could harm the company’s path to profitability: Tesla’s (NASDAQ:TSLA) launching of a price war.

My Verdict on NIO

Tesla’s recent vehicle price cuts have made big news stateside this month, but besides cutting prices in the U.S. and Europe, the EV powerhouse has also slashed them in China. Sure, price isn’t the only factor EV buyers consider before choosing one brand over another.

Yet with Xpeng (NYSE:XPEV) also implementing price cuts, Nio may have to ultimately follow suit. Lowering prices could weigh on this currently unprofitable EV maker’s margins.

Put simply, a lot remains up in the air with this popular EV name.

Until more positive developments arise, such as continued strong delivery numbers, and promising updates to guidance, rather than a good buy, my verdict on NIO stock is wait and see.

On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.