NIO Stock – Why NIO Stock Is Higher Today
What took place
Shares of NIO (NYSE: NIO) were relocating greater on Monday after the Chinese electric-vehicle manufacturer said that its manufacturing companion had consented to increase its production capacity 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 price.
Some history: NIO does not possess a manufacturing facility; its vehicles are made under contract by a joint venture with government-owned car manufacturer Jianghuai Auto 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 signed a new three-year agreement with JAC to proceed that plan via ( at the very least) May of 2024. As part of the offer, JAC has actually consented to increase the production ability of the factory to 240,000 automobiles per year, or 20,000 each month— dual its present capacity. NIO Stock.
NIO and JAC didn’t say when that capacity rise will be in place, however the statement is likely why NIO stock is trading higher today.
Auto financiers that follow NIO stock know that the company has actually been working since late last year to enhance output at JAC‘s manufacturing facility amid fast-rising need for its stylish electric SUVs. The business had the ability to raise the manufacturing rate from about 5,000 lorries a month to 7,500 monthly in early January and also has pressed it higher because.
At a ceremony to note the 100,000 th NIO developed at the manufacturing facility in very early April, Chief Executive Officer William Li Bin stated that the manufacturing facility can now construct about 10,000 NIOs per month. Yet, Li stated, manufacturing has yet to hit that number because of an ongoing global lack of automotive semiconductors.
NIO stock and most various other affected automakers now expect the chip shortage to last into 2022, though products are expected to enhance rather in the 2nd fifty percent of this year.