Nio jumps after inking new deal with manufacturing partners to expand annual production to 240,000 electric cars

  • Nio shares leaped more than 5% on Monday after reaching new manufacturing agreements with factories in China.
  • Nio’s production capacity at state-owned JAC will increase to 240,000 units.
  • Nio shares are down year-to-date after hitting an all-time high in January.
  • See more stories on Insider’s business page.

Nio shares ended with a more than 5% rise on Monday after the electric vehicle maker struck new agreements with two manufacturers in China, one of which will nearly double Nio’s production capacity.

The company, which is Tesla’s biggest competitor in China, said it renewed manufacturing contracts with Jianghuai Automobile Group Co., or JAC, and Jianglai Advanced Manufacturing Technology, or Jianglai. Financial terms of the deals were not disclosed in Nio’s statement.

State-owned JAC will make vehicles for Nio in the city of Heifei for another three years, until 2024, and will expand its annual production capacity to 240,000 units. Nio said the expansion will help it meet the growing demand for its cars. Earlier this year, Nio said was aiming to reach 150,000 units in annual production under one shift.

Shares of Nio rose as much as 7.1% to $36.49 during Monday’s session before closing it up by 5.4% at $35.89.The shares in January hit an all-time high of near $67 but over the course of the year have dropped about 26%, hurt by persistent selloffs in growth stocks as the prospect of surging inflation rattled investors. But over the past 12 months, the value of Nio’s value has surged by more than 1000% from close to $4.

Nio said Jianglai will be responsible for parts assembly and operation management. Jianglai is a joint venture between JAC and NIO where Nio holds a 49% equity stake.

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Nio reverses losses, jumps 6% after record 1st-quarter deliveries outweigh chip-supply shortages

NIO EP9 electric car is displayed at its store in Beijing
NIO EP9 electric car is displayed at its store in Beijing

  • Nio reversed its early-morning losses and jumped as much as 6% on Friday after its record first-quarter earnings was overwhelmed by chip supply shortages.
  • Nio saw its first-quarter revenue grow 481% to $1.2 billion, handily beating analyst estimates.
  • “The supply chain is still facing significant challenges due to the semiconductor shortage,” Nio’s CEO said.
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The ongoing global computer chip shortage that has impacted automakers across the globe is also hurting Nio, according to the company’s first-quarter earnings report.

Nio initially fell as much as 4% in Friday trades after its first-quarter earnings beat was overshadowed by the potential slowdown in car production due to a lack of semiconductor supply. But those losses were ultimately reversed, with investors brushing aside chip supply concerns and bidding shares of Nio higher by as much as 6%.

“The overall demand for our products continues to be quite strong, but the supply chain is still facing significant challenges due to the semiconductor shortage,” Nio CEO William Li said.

Nio was already forced to lower its delivery guidance and temporarily halt production last month due to the lack of supply of semiconductors.

The supply shortage has been top of mind for investors this past week, with Apple CEO Tim Cook telling investors it was forced to delay iMac and iPad production and Tesla CEO Elon Musk telling investors the electric vehicle maker has had “insane difficulties” with its supply chain over the last quarter. Ford also said it expects a significant hit to production due to the supply shortage.

First-quarter revenue for Nio hit a record $1.2 billion, handily beating analyst estimates by $160 million and representing year-over-year growth of 481% as demand for electric vehicles in China soars. The company delivered 20,060 vehicles in the quarter, representing a 423% increase year-over-year and a sequential increase of 16%.

The China-based EV manufacturer expects to deliver 21,000-22,000 vehicles in the second quarter, representing year-over-year growth of more than 100%.

Nio isn’t the only car company experiencing a surge in demand from Chinese consumers. Tesla CEO Elon Musk believes China will represent the company’s biggest market in the future, as it continues to scale production in the country.

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Nio’s 2-day plunge stretches to 24% as electric-vehicle stock momentum slows

  • Nio shares fell as much as 18% Tuesday, extending their two-day loss to 24%.
  • The company is one of several electric-vehicle makers to see sharp two-day declines.
  • Tesla specifically has led a broader sell-off in tech stocks.
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Nio stock slid as much as 18% on Tuesday, extending the electric-vehicle maker’s two-day skid to 24%. The company has been swept up in a broader industry sell-off led by larger rival Tesla.

Shares of both company are being pulled back alongside other technology stocks as investors evaluate rising borrowing costs in the face of rising bond yields. Bond yields have stepped higher as investors price in a potential pickup in inflation on the back of economic recovery from the COVID-19 pandemic.

“Given their aggressive discounting to present of long-term cash flows, they’re suffering from the same effects as investment grade corporate bonds and anything else that pushes cash flow far into the future,” Bespoke Investment Group said of tech stocks in a Monday note.

For evidence, the firm highlighted the Nasdaq 100‘s more than 4% underperformance versus the Russell 2000 index of small-cap stocks over the past two days.

Tesla shares fell 5% as much as 9% on Tuesday following a similarly-sized drop the prior day. The stock has been under pressure since the company stopped orders for the lowest-priced version of its Model Y SUV over the weekend.

Prior to the two-day dip, Nio’s stock price had been climbing in recent months on growing interest among investors in electric vehicles and green-energy products, factors that have also contributed to the surge in shares of EV maker Tesla.

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