NIO Stock – Why NIO Stock Is Higher Today
What happened
Shares of NIO (NYSE: NIO) were moving greater on Monday after the Chinese electric-vehicle maker said that its manufacturing companion had actually accepted increase its manufacturing capacity to develop to 240,000 NIOs each year.
As of 1:15 p.m. EDT, NIO‘s American depositary shares were up around 5.7% from Friday‘s closing price.
So what
Some background: NIO does not own a factory; its vehicles are manufactured under contract by a joint venture with government-owned automaker Jianghuai Auto Team, or JAC, in a JAC-owned manufacturing facility in the industrial city of Hefei, near NIO‘s head office.
NIO said on Monday early morning that it has signed a brand-new three-year agreement with JAC to continue that plan through (at least) May of 2024. As part of the offer, JAC has consented to boost the production capability of the factory to 240,000 vehicles annually, or 20,000 each month— double its current ability. NIO Stock.
NIO as well as JAC didn’t claim when that capacity increase will certainly remain in location, however the announcement is most likely why NIO stock is trading higher today.
Currently what
Automobile financiers that adhere to NIO stock recognize that the firm has actually been working given that late in 2014 to increase output at JAC‘s manufacturing facility amidst fast-rising need for its stylish electrical SUVs. The business was able to enhance the manufacturing price from about 5,000 cars a month to 7,500 monthly in very early January as well as has pressed it higher considering that.
At a event to note the 100,000 th NIO constructed at the factory in very early April, CEO William Li Container said that the manufacturing facility can now construct about 10,000 NIOs per month. Yet, Li said, manufacturing has yet to hit that figure due to an ongoing global scarcity of automobile semiconductors.
NIO stock as well as most other impacted car manufacturers currently anticipate the chip scarcity to last into 2022, though materials are expected to enhance rather in the 2nd fifty percent of this year.
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