NIO Stock – Why NIO Stock Is Greater Today
What took place
Shares of NIO (NYSE: NIO) were relocating greater on Monday after the Chinese electric-vehicle maker claimed that its manufacturing partner had actually agreed to increase its manufacturing ability to develop to 240,000 NIOs annually.
Since 1:15 p.m. EDT, NIO‘s American depositary shares were up around 5.7% from Friday‘s closing price.
Some background: NIO doesn’t possess a factory; its lorries are made under contract by a joint venture with government-owned car manufacturer Jianghuai Auto Group, or JAC, in a JAC-owned manufacturing facility in the industrial city of Hefei, near NIO‘s headquarters.
NIO stated on Monday early morning that it has actually authorized a brand-new three-year agreement with JAC to proceed that plan through ( at the very least) May of 2024. As part of the bargain, JAC has agreed to raise the manufacturing capacity of the factory to 240,000 lorries per year, or 20,000 monthly— dual its current capability. NIO Stock.
NIO and also JAC didn’t claim when that ability boost will remain in place, however the announcement is likely why NIO stock is trading greater today.
Auto capitalists who comply with NIO stock understand that the business has been functioning because late in 2015 to enhance result at JAC‘s factory amid fast-rising need for its fashionable electric SUVs. The firm was able to enhance the production price from about 5,000 cars a month to 7,500 monthly in very early January as well as has actually pressed it higher given that.
At a event to note the 100,000 th NIO developed at the manufacturing facility in very early April, Chief Executive Officer William Li Container said that the manufacturing facility can now construct concerning 10,000 NIOs each month. But, Li stated, production has yet to hit that number because of an continuous worldwide scarcity of vehicle semiconductors.
NIO stock and most various other impacted automakers now anticipate the chip shortage to last into 2022, though materials are expected to improve somewhat in the second half of this year.