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Nio stock price is rising. Deliveries in July have reached record highs. The Chinese company may become a serious competitor to Elon Musk’s Tesla.
Nio Inc (NYSE: NIO) stock price is slightly up in the pre-market as incoming data from the Tesla Inc (NASDAQ: TSLA) challenger indicated that business has been great. The company has shown higher deliveries of 3,533 cars in the past month. It represents a 322% rise from the same period last year. NIO stock price closed higher at the end of trading yesterday.
At the time of filing this report, NIO shares were at $13.90, adding 2.21%. Despite the COVID-19 pandemic, 2020 has been a good year for the company. The Chinese EV maker has delivered 17,702 vehicles this year. It is higher than a 111% increase in this year so far.
Nio (NIO) Stock Price Rises as Chinese Economy Rebounds
It also comes as the Chinese economy rebounds from the throes of the pandemic. In February, car sales in the country dropped by up to 80%. By March, sales fell by as much as 43%. In April, there were weak signs of improvement with 4.4% and 14.3% in May. The event is also a record-breaking one. It is the second-largest number of deliveries ever for Nio (NIO). It also occurred despite a 5-day manufacturing hiatus to prepare for the production of the EC6.
William Bin Li, founder, chairman, and CEO of Nio said:
“More proudly, we have achieved a record-high monthly order growth, attributed to a stronger demand of the ES8 and ES6, together with the increasing EC6 orders, thanks to the continuous support of our users”.
“We believe we will be able to increase our production capacity significantly to support higher deliveries in the third quarter of 2020.”
Nio (NIO) seems set to become the Chinese answer to Elon Musk‘s Tesla (TSLA) which relied on private funds and innovation to break boundaries. Nio is dependent on a bit of private innovation and state support to get the job done. The Heifei Municipality deal is a case in point. As the market rebounds for the Chinese market, Nio is in a favorable position to rule it in terms of orders.
EV Demand Is Also Growing
Demand for EVs had dwindled at the start of the year. Coupled with the then-emerging COVID-19 pandemic brought the Chinese EV industry to its knees. As the Chinese economy chugs back to life, there might be a renewed interest in electric vehicles.
EVs hold several advantages over internal combustible cars. Chief among them is the constant need to refuel and service the engines. It adds to the maintenance cost.
Millennials globally are going to be looking towards cutting costs after the pandemic. It will tide the demand for EVs through. Nio (NIO) holds an advantage in this regard. China’s large population is also tech-savvy. One thing they are known for is their budget-consciousness. It is something that the Nio EC6 will bring to the table. With a pre-subsidy price of RMB 368,000 ($52,697.15), the EC6 will compete favorably against the Tesla Model S.
The Model S goes for between $85,000 and $119,000 depending on the features. The Chinese will give the EC6 a second look. Added to that, the demand for the ES6 is soaring and it will continue. There were deliveries of 2,610 ES6’s in July alone. That is something that could be keeping Elon Musk up at night at the moment.