NIO stock: Is there hope?

The NIO share had recently taken a truly disastrous development. Driven by fears that the Chinese electric carmaker could be threatened with delisting from the New York Stock Exchange, the papers had fallen from more than 18 U.S. dollars a little over a week ago to less than 13 dollars on Tuesday evening. But NIO shares have recovered significantly since then, currently trading back at more than $14 on the Nasdaq. That apparently has to do with recent news from the Tesla challenger, which is probably where the hopes of many lie.

NIO on the way to mass production

That’s because, as reported by pandaily.com and others, local Chinese authorities announced that the Hefei Economic and Technological Development Area (Hefei ETDA) and electric vehicle manufacturer NIO signed a new cooperation agreement on Tuesday. “The partnership covers the second phase of a vehicle and key core component production project at “NeoPark”, an industrial site in Xinqiao, Hefei,” it said. In other words, NIO is taking the next step toward mass production.

Because while the current NIO models are in the premium segment, electric cars for the mid- and luxury class are to be built at the new production site from 2024. The manufacturer plans to establish its own sub-brand for this purpose. In March, NIO CEO William Li revealed that the core team for this had already been put together and that there was “a clear development plan”.

NIO share with massive losses

The fact that NIO is now apparently putting its money where its mouth is seems to have given investors renewed courage. A little, at least. Despite the current recovery, the share price continues to be characterized by massive markdowns in the medium term. In the past six months alone, NIO has lost more than 60 percent of its market value.