NIO Stock – Why NIO Stock Is Higher Today
What took place
Shares of NIO (NYSE: NIO) were moving greater on Monday after the Chinese electric-vehicle manufacturer said that its production partner had accepted increase its manufacturing capacity to accumulate to 240,000 NIOs each year.
As of 1:15 p.m. EDT, NIO‘s American depositary shares were up about 5.7% from Friday‘s closing cost.
Some history: NIO does not own a factory; its lorries are produced under contract by a joint venture with government-owned automaker Jianghuai Vehicle Team, or JAC, in a JAC-owned manufacturing facility in the commercial city of Hefei, near NIO‘s headquarters.
NIO claimed on Monday morning that it has actually signed a new three-year agreement with JAC to proceed that plan via (at least) May of 2024. As part of the deal, JAC has accepted raise the manufacturing capability of the manufacturing facility to 240,000 vehicles per year, or 20,000 monthly— double its existing ability. NIO Stock.
NIO and also JAC didn’t claim when that capacity increase will certainly remain in area, yet the announcement is most likely why NIO stock is trading higher today.
Automobile financiers who comply with NIO stock understand that the firm has actually been working since late in 2014 to increase output at JAC‘s manufacturing facility in the middle of fast-rising need for its trendy electrical SUVs. The business had the ability to boost the production rate from around 5,000 automobiles a month to 7,500 per month in early January and has pressed it greater since.
At a ceremony to note the 100,000 th NIO built at the factory in very early April, CEO William Li Bin claimed that the factory can now develop concerning 10,000 NIOs monthly. Yet, Li said, manufacturing has yet to strike that number as a result of an continuous international shortage of automotive semiconductors.
NIO stock as well as most other influenced car manufacturers now expect the chip scarcity to last right into 2022, though materials are anticipated to boost rather in the 2nd half of this year.