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Tesla rival Nio hasn’t lowered its annual forecast as a result of the coronavirus. At the time of writing, NIO stock is 12% up.
Nio Inc (NYSE: NIO), the Chinese electric carmaker, has indicated that the COVID-19 storm is over for it. The CEO of the Tesla competitor has said that the company intends to achieve its targets this year. Sources say that William Li said:
“Nio hasn’t lowered its annual forecast as a result of the virus. There was certainly some impact in the first quarter, but for the second quarter, right now we don’t think there is much of an impact to the original plan.”
Li’s comments come as China is resuming business. Formerly the epicenter of the coronavirus, China has been able to beat off the worst and the wheels of its economy are turning again.
Nio Was Affected by COVID-19
Li indicated that the coronavirus had affected its supply chain. He also indicated that manufacturing is back on track for the Chinese EV maker. This readiness has been on since the last two weeks of March.
Li also maintained that the company’s internal processes weren’t affected. Things will move on smoothly from now on.
Nio has been touted as a rival to Tesla. Things haven’t been smooth for the carmaker this year. the company has had its money issues. Shares of the auto market in China have fallen by more than 33% as well.
These situations led many pundits to believe that Nio may never rise again. To make matters seem worse for Nio, Tesla has been making progress on its Shanghai factory.
There seems to be light at the end of the tunnel, however. Nio had announced an investment of about $ 1 billion by strategic partners. This seems to be a part of the earlier reported partnership with the Heifei province.
Sources say that the shareholding of the special purpose vehicle will be in a ratio of 75.9% to 24.1%. The minority of the shareholding is in favor of the investors while Nio will hold the rest. Part of the plans reportedly includes the sighting of Nio’s Chinese headquarters in Hefei.
Nio stock prices have gone up by as much as 15% in anticipation of the news. This comes as the Chinese look at other alternatives to combustion engines. At the time of writing, NIO stock is 11.68%, at $3.73.
Nio and Tesla Electric Vehicles Expected to Become Popular in China
Many Chinese cities have had a pollution issue before now. The net effect of this can be seen due to the movement restrictions that occurred earlier this year. As pollution levels subsided, smog in many cities all but disappeared.
Apart from this, the many advantages of an electric vehicle for the Chinese are obvious. The large Chinese population will soon be making the difficult choice of leaving their combustibles behind.
As the world goes into anticipation of a finale to the COVID-19 pandemic, many are wondering what comes next. Companies like Nio will have a place in a post-COVID-19 world. They only have to work hard at developing homegrown technology.