What happened
Shares of Chinese electric-vehicle maker NIO (NYSE: NIO) were trading higher on Thursday after the company said that it had hit a key production milestone. As of 12:25 p.m. EDT, NIO's American depositary shares were up by about 10.6% from Wednesday's closing price.
So what
NIO said that its 5,000th vehicle of the month rolled off the production line on Thursday, marking the first time that the company has manufactured more than 5,000 vehicles in one month. The achievement comes after the automaker made some upgrades to its production line during the third quarter.
Workers paused to celebrate NIO's production milestone on Thursday. Image source: NIO.
NIO doesn't yet have a factory of its own; its vehicles are built under contract by Anhui Jianghuai Automobile Group (often referred to as JAC Motors) in a factory near NIO's new headquarters in Hefei, the capital of China's Anhui province. NIO has a dedicated production line in JAC's Hefei plant; its engineers worked with JAC to increase production ahead of the launch of NIO's third model, the EC6 crossover, in September.
NIO delivered 4,708 vehicles to customers in September, its best-ever monthly total -- but it appears likely that record will be broken shortly. That's why NIO's stock is trading higher Thursday.
Now what
Auto sector investors' eyes will turn to NIO again when the company reports its third-quarter results, likely in mid-November. Sales were strong in the quarter, and I expect earnings will be strong as well -- but what investors will be most looking forward to is an update on the company's growth plans, including details about its next new model, which is due early in 2021.
10 stocks we like better than NIO Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and NIO Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of October 20, 2020
John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
