Insights

The Big Breaking News That Sent Nio Stock Surging Early Today

What happened
After Nio (NYSE: NIO) stock’s Monday crash, the electric vehicle (EV) stock opened Tuesday on a strong note, even surging as high as 8.3% at one point in early trading. Although Nio shares gave up most of those gains and then some as the day progressed, they were back in the green as of 1:35 p.m. ET.
Had it not been for the choppy market, Nio shares could have easily sustained momentum through the day given the big breaking news that came in this morning.
So what
The stock market sell-off and the threat of Nio shares delisting from the U.S. exchanges have put significant pressure on Nio shares this week. It didn’t help Nio’s case either that a large shareholder — Norway’s central bank, Norges Bank — reportedly dumped its entire stake in the EV maker last quarter according to a regulatory report filed on May 9.
So when China-based new energy vehicle focused website CnEVPost reported a development this morning that sounds significant to Nio’s future, the market was quick to swoop up some shares of the EV maker, especially after yesterday’s crash.
This morning, CnEVPost reported Nio signed an agreement with an economic development zone in Hefei, China, to build a plant for Nio’s new mid- to high-end brand that it plans to launch.
Image source: Getty Images.

According to CnEVPost the plant is expected to be completed and start production as early as 2024. The article further noted that Nio’s new brand will compete with the likes of Tesla and Volkswagen, and that Nio’s first sub-brand products are already in “key development stages.”
This is huge, as it confirms Nio’s intent to launch a mass-market brand that the company has often spoken about. During its fourth-quarter earnings conference call, Nio CEO William Li even elucidated how the company will not follow Tesla’s footsteps and launch vehicle with big price gaps, but instead focus on a price range of $30,000 to $50,000 a car to cater to the masses.
Now what
Nio has often said it dreams about building affordable EVs for the masses that are also better than Tesla cars. Whether and how Nio cars will beat Tesla is anyone’s guess, but if CnEVPost’s latest report is anything to go by, Nio seems to have its goal in sight. I wouldn’t be surprised to see Nio shares rise as and when the company decides to officially announce any progress on its mass-market brand front; and when that happens, investors panic-selling Nio shares now may look back in regret.
Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nio Inc. and Tesla. The Motley Fool has a disclosure policy. –

What happened

After Nio (NYSE: NIO) stock’s Monday crash, the electric vehicle (EV) stock opened Tuesday on a strong note, even surging as high as 8.3% at one point in early trading. Although Nio shares gave up most of those gains and then some as the day progressed, they were back in the green as of 1:35 p.m. ET.

Had it not been for the choppy market, Nio shares could have easily sustained momentum through the day given the big breaking news that came in this morning.

So what

The stock market sell-off and the threat of Nio shares delisting from the U.S. exchanges have put significant pressure on Nio shares this week. It didn’t help Nio’s case either that a large shareholder — Norway’s central bank, Norges Bank — reportedly dumped its entire stake in the EV maker last quarter according to a regulatory report filed on May 9.

So when China-based new energy vehicle focused website CnEVPost reported a development this morning that sounds significant to Nio’s future, the market was quick to swoop up some shares of the EV maker, especially after yesterday’s crash.

This morning, CnEVPost reported Nio signed an agreement with an economic development zone in Hefei, China, to build a plant for Nio’s new mid- to high-end brand that it plans to launch.

Image source: Getty Images.

According to CnEVPost the plant is expected to be completed and start production as early as 2024. The article further noted that Nio’s new brand will compete with the likes of Tesla and Volkswagen, and that Nio’s first sub-brand products are already in “key development stages.”

This is huge, as it confirms Nio’s intent to launch a mass-market brand that the company has often spoken about. During its fourth-quarter earnings conference call, Nio CEO William Li even elucidated how the company will not follow Tesla’s footsteps and launch vehicle with big price gaps, but instead focus on a price range of $30,000 to $50,000 a car to cater to the masses.

Now what

Nio has often said it dreams about building affordable EVs for the masses that are also better than Tesla cars. Whether and how Nio cars will beat Tesla is anyone’s guess, but if CnEVPost’s latest report is anything to go by, Nio seems to have its goal in sight. I wouldn’t be surprised to see Nio shares rise as and when the company decides to officially announce any progress on its mass-market brand front; and when that happens, investors panic-selling Nio shares now may look back in regret.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nio Inc. and Tesla. The Motley Fool has a disclosure policy.

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