Chinese Electric Vehicle Maker Sees Shares Skyrocket
Nio, a leading electric vehicle (EV) manufacturer in China, has seen its shares plummet by nearly 30% so far this year. However, investors who bought into the company more recently have been handsomely rewarded. Over the past month, Nio’s shares have surged by an impressive 65%, with a significant portion of that gain coming in the past few days.
Today, the company’s U.S.-listed shares continued their upward trend, jumping 12.7% as of mid-morning. The catalyst behind this latest spike is Nio’s announcement that it has secured a substantial capital injection from strategic investors in China. The deal will see three investors inject the equivalent of nearly $500 million into Nio China, the company’s primary operating unit.
In addition to this investment, Nio will also contribute cash to purchase newly issued shares of Nio China, bringing the total cash injection to a staggering $2 billion. As a result, Nio will hold a significant 88% stake in Nio China, with existing investors retaining a 12% interest.
Despite finishing the second quarter with a healthy $5.7 billion in cash reserves, Nio is expected to burn through approximately $1 billion annually over the next two years as it ramps up production and sales. To achieve this goal, the company has taken a significant step by launching its new Onvo brand, which targets the mass market with family-friendly vehicles. The first model under this brand, the L60 SUV, has seen stronger-than-anticipated order intake, with deliveries commencing last week.
Investors will be eagerly awaiting Nio’s September vehicle delivery results, which are set to be released tomorrow morning. The company has consistently delivered over 20,000 EVs for four consecutive months, and expectations are high that this streak will continue.
Before investing in Nio, it’s essential to consider alternative options. The Motley Fool’s Stock Advisor team has identified what they believe are the top 10 stocks for investors to buy now, and Nio didn’t make the cut. These 10 stocks have the potential to generate substantial returns in the coming years, as seen in the past with companies like Nvidia.
Leave a Reply