NIO Stock – Why NIO Stock Is Higher Today
What happened
Shares of NIO (NYSE: NIO) were relocating greater on Monday after the Chinese electric-vehicle maker claimed that its manufacturing companion had actually consented to increase its manufacturing capacity to build up to 240,000 NIOs per year.
As of 1:15 p.m. EDT, NIO‘s American depositary shares were up around 5.7% from Friday‘s closing rate.
So what
Some background: NIO does not have a manufacturing facility; its cars are produced under contract by a joint venture with government-owned car manufacturer Jianghuai Automobile Team, or JAC, in a JAC-owned factory in the commercial city of Hefei, near NIO‘s head office.
NIO stated on Monday early morning that it has authorized a brand-new three-year agreement with JAC to proceed that plan through ( a minimum of) May of 2024. As part of the offer, JAC has accepted enhance the manufacturing ability of the factory to 240,000 automobiles annually, or 20,000 each month— double its present capacity. NIO Stock.
NIO and JAC really did not say when that capability boost will certainly remain in place, but the announcement is most likely why NIO stock is trading greater today.
Now what
Auto investors who adhere to NIO stock know that the company has actually been working since late last year to increase output at JAC‘s factory amid fast-rising need for its stylish electrical SUVs. The company was able to raise the production price from around 5,000 cars a month to 7,500 monthly in early January as well as has actually pushed it greater because.
At a ceremony to mark the 100,000 th NIO built at the factory in very early April, CEO William Li Bin claimed that the factory can now develop about 10,000 NIOs each month. But, Li stated, manufacturing has yet to hit that number because of an recurring international scarcity of auto semiconductors.
NIO stock as well as most other impacted automakers now expect the chip shortage to last into 2022, though products are anticipated to boost somewhat in the second fifty percent of this year.
