NIO Stock – Why NIO Stock Is Greater Today
What took place
Shares of NIO (NYSE: NIO) were relocating higher on Monday after the Chinese electric-vehicle maker claimed that its production companion had actually agreed to double its manufacturing ability to develop to 240,000 NIOs annually.
Since 1:15 p.m. EDT, NIO‘s American depositary shares were up about 5.7% from Friday‘s closing rate.
Some history: NIO does not have a manufacturing facility; its vehicles are produced under contract by a joint venture with government-owned automaker Jianghuai Auto Group, or JAC, in a JAC-owned manufacturing facility in the industrial city of Hefei, near NIO‘s head office.
NIO said on Monday morning that it has actually signed a brand-new three-year contract with JAC to continue that plan through ( at the very least) May of 2024. As part of the deal, JAC has actually consented to raise the manufacturing ability of the manufacturing facility to 240,000 cars per year, or 20,000 each month— dual its current capacity. NIO Stock.
NIO and JAC didn’t claim when that ability increase will certainly remain in location, yet the announcement is most likely why NIO stock is trading greater today.
Vehicle financiers who comply with NIO stock recognize that the business has been functioning since late last year to raise result at JAC‘s factory in the middle of fast-rising need for its stylish electrical SUVs. The firm was able to increase the production price from around 5,000 vehicles a month to 7,500 each month in very early January as well as has pushed it higher since.
At a event to note the 100,000 th NIO developed at the factory in very early April, Chief Executive Officer William Li Container stated that the manufacturing facility can now develop concerning 10,000 NIOs per month. However, Li claimed, production has yet to hit that figure because of an recurring global shortage of vehicle semiconductors.
NIO stock as well as most other impacted car manufacturers now anticipate the chip lack to last into 2022, though supplies are anticipated to boost somewhat in the 2nd half of this year.