Nio jumps after inking new deal with manufacturing partners to expand annual production to 240,000 electric cars
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- Nio shares leaped more than 5% on Monday after reaching new manufacturing agreements with factories in China.
- Nio's production capacity at state-owned JAC will increase to 240,000 units.
- Nio shares are down year-to-date after hitting an all-time high in January.
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Nio shares ended with a more than 5% rise on Monday after the electric vehicle maker struck new agreements with two manufacturers in China, one of which will nearly double Nio's production capacity.
The company, which is Tesla's biggest competitor in China, said it renewed manufacturing contracts with Jianghuai Automobile Group Co., or JAC, and Jianglai Advanced Manufacturing Technology, or Jianglai. Financial terms of the deals were not disclosed in Nio's statement.
State-owned JAC will make vehicles for Nio in the city of Heifei for another three years, until 2024, and will expand its annual production capacity to 240,000 units. Nio said the expansion will help it meet the growing demand for its cars. Earlier this year, Nio said was aiming to reach 150,000 units in annual production under one shift.
Shares of Nio rose as much as 7.1% to $36.49 during Monday's session before closing it up by 5.4% at $35.89.The shares in January hit an all-time high of near $67 but over the course of the year have dropped about 26%, hurt by persistent selloffs in growth stocks as the prospect of surging inflation rattled investors. But over the past 12 months, the value of Nio's value has surged by more than 1000% from close to $4.
Nio said Jianglai will be responsible for parts assembly and operation management. Jianglai is a joint venture between JAC and NIO where Nio holds a 49% equity stake.