NIO Stock – Why NIO Stock Is Higher Today
What took place
Shares of NIO (NYSE: NIO) were relocating higher on Monday after the Chinese electric-vehicle maker said that its production companion had consented to increase its manufacturing capability to develop to 240,000 NIOs each year.
Since 1:15 p.m. EDT, NIO‘s American depositary shares were up around 5.7% from Friday‘s closing rate.
So what
Some history: NIO does not possess a manufacturing facility; its vehicles are manufactured under contract by a joint endeavor with government-owned car manufacturer Jianghuai Car Team, or JAC, in a JAC-owned manufacturing facility in the commercial city of Hefei, near NIO‘s headquarters.
NIO stated on Monday morning that it has authorized a brand-new three-year agreement with JAC to proceed that setup through ( a minimum of) May of 2024. As part of the offer, JAC has actually agreed to boost the production capacity of the manufacturing facility to 240,000 cars per year, or 20,000 monthly— double its present capacity. NIO Stock.
NIO and also JAC really did not state when that capability boost will certainly be in place, yet the announcement is most likely why NIO stock is trading higher today.
Now what
Vehicle capitalists that comply with NIO stock understand that the firm has been functioning since late in 2014 to raise outcome at JAC‘s manufacturing facility amidst fast-rising need for its fashionable electric SUVs. The firm was able to raise the production rate from about 5,000 cars a month to 7,500 monthly in early January and has actually pressed it greater since.
At a event to mark the 100,000 th NIO constructed at the factory in very early April, CEO William Li Container stated that the manufacturing facility can currently develop regarding 10,000 NIOs per month. Yet, Li claimed, manufacturing has yet to strike that figure due to an ongoing worldwide shortage of auto semiconductors.
NIO stock and also most various other affected car manufacturers currently expect the chip scarcity to last into 2022, though materials are expected to enhance rather in the 2nd half of this year.