What happened
After finishing last week near where they started, shares New (NIO 13.14%) They’re taking a different path today, charged and headed higher. The news that the Chinese government is active in spurring clean energy business growth was behind the stock rally.
As of 1:26 PM ET, shares of Nio are up 12.6%.
so what
In an effort to revitalize its lagging economy, the National Development and Reform Commission (NDRC), a government agency responsible for China’s economic development, has stated that it is interested in bringing in private capital to help advance major projects across the country.
The National Disaster Management Committee has identified a variety of sectors it hopes to spur growth including transportation and clean energy.
Not surprisingly, investors celebrated today the news of the Chinese government’s focus on economic development, specifically in areas related to Nio. The company reported 23,520 vehicle deliveries in the uninspiring second quarter of 2023 – an annual decline of more than 6%.
The waning demand for Nio cars comes at a particularly bad time as the company recently launched two new models: the ET5 midsize sedan and the ES8 SUV.
What now
The Chinese government’s drive to spark clean energy and transportation business is undoubtedly good news for Nio, and investors will certainly want to pay attention to see if NDRC succeeds in developing projects that benefit from it.
But it is not just China that investors should be watching. Nio recently reported that it had closed on a nearly $740 million equity investment from CYVN Investments, an investment group owned by the Abu Dhabi government. While demand for its cars in China has been declining lately, the electric car company is likely to find increased demand in the Middle East.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has posts on and recommends Nio. The Motley Fool has a disclosure policy.
