NIO Stock – Why NIO Stock Is Higher Today
What happened
Shares of NIO (NYSE: NIO) were relocating higher on Monday after the Chinese electric-vehicle maker claimed that its manufacturing partner had actually agreed to increase its production capacity to accumulate to 240,000 NIOs per year.
As of 1:15 p.m. EDT, NIO‘s American depositary shares were up about 5.7% from Friday‘s closing price.
So what
Some history: NIO doesn’t have a manufacturing facility; its cars are made under contract by a joint endeavor with government-owned automaker Jianghuai Automobile 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 brand-new three-year contract with JAC to proceed that plan with ( at the very least) May of 2024. As part of the deal, JAC has consented to increase the manufacturing ability of the factory to 240,000 vehicles each year, or 20,000 per month— double its existing capability. NIO Stock.
NIO and also JAC didn’t say when that ability rise will be in place, but the announcement is likely why NIO stock is trading greater today.
Now what
Auto capitalists who follow NIO stock know that the business has actually been working given that late last year to raise result at JAC‘s factory amid fast-rising demand for its stylish electrical SUVs. The business was able to boost the manufacturing rate from around 5,000 vehicles a month to 7,500 per month in early January and also has actually pressed it higher because.
At a event to mark the 100,000 th NIO built at the manufacturing facility in very early April, CEO William Li Container stated that the factory can now construct regarding 10,000 NIOs per month. Yet, Li stated, production has yet to strike that number because of an ongoing global shortage of auto semiconductors.
NIO stock and also most other influenced automakers currently anticipate the chip shortage to last right into 2022, though materials are anticipated to improve somewhat in the second half of this year.