Why Nio Stock Is on Fire Today
What happened
Nio (NYSE: NIO) stock was trading up 14.4% as of 12:55 p.m. ET Wednesday. Multiple factors seemed to be sending the electric vehicle (EV) stock soaring.
So what
At its annual investor day event late last year, Nio said it expected to start deliveries of its flagship electric sedan ET7 by March 28. The latest updates from China suggest Nio is on track with its plans.
Image source: Nio.
Nio has reportedly started test drives of the ET7 in China and will offer media outlets an opportunity to drive the electric car this coming weekend, according to CnEvPost. The EV news outlet from China also reported that Nio has started with roughly 300 test drives per day but is expected to scale that up to 1,000 drives a day. Except for a software upgrade, the vehicles being used for test drives are ready for delivery.
CnEvPost also reported the ET7 is receiving positive reviews after test drives, with some reservation holders even offering to sell their preorders online for up to three times the initial pre-deposit amount. That could be seen as a sign of strong customer interest in ET7.
Meanwhile, Nio stock is all set to start trading on the Hong Kong stock exchange tomorrow in lots of 10 shares. Once the stock commences trading, investors will at least have to worry less about the potential threat of Nio getting delisted in the U.S. under tighter regulations over documentation for foreign stocks. This threat has weighed heavily on Nio shares in recent months, but investors will now finally have an option to trade the stock in Hong Kong if it gets delisted from the U.S. stock exchange.
Now what
There's yet another reason why Nio shares catapulted higher today. In his latest note to investors, Morgan Stanley analyst Adam Jonas expressed concern over the ongoing input supply crunch in the EV industry, but also hinted that Tesla and local Chinese EV makers could be best poised to meet their production targets. Nio is among the popular local EV makers in China.
With Nio recently disappointing with its February delivery numbers that portend decelerating growth, any development, even if small or speculative, that puts Nio in a positive light can send the stock higher.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool owns and recommends NIO Inc. and Tesla. The Motley Fool has a disclosure policy.
