Over recent weeks, Nio’s stock (NYSE: NIO) has surged on an exhilarating trajectory, leaving investors astounded.
The Chinese electric vehicle (EV) manufacturer has been fueled by remarkable delivery and production figures in the expanding EV market. Adding to this momentum, a substantial investment from an Abu Dhabi government-owned business has further bolstered Nio’s position, signaling even greater prospects for the company’s future.
In continuation of this trend, Nio staged another stock market rally on July 25, surging nearly 11%. This time, the surge was fueled by the Chinese government’s promise to boost the growth of local clean energy businesses.
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Nio stock price analysis
At publication time, US-listed shares of Nio were standing at $11.73, up 10.87% in the past 24 hours.
Over the past week, the EV maker’s stock gained more than 13% and over 36% on the month, adding more than $5.2 billion over that period.
The latest upswing took Nio’s shares to a fresh 5-month high. The stock is now up about 70% since late May when it printed 3-year lows. Despite these gains, Nio stock still trades over 80% off the all-time high.
Nevertheless, NIO is now testing the important resistance around the $12 mark. Clearing that barrier could pave the way for shares to test the next resistance level around $14.
Why is Nio stock soaring?
On Monday, the National Development and Reform Commission (NDRC), a Chinese government agency responsible for economic developments, said it intends to attract private capital in order to fuel the growth of several major industries such as transportation, clean energy, and infrastructure.
The government’s clean energy push was welcomed by NIO and other EV investors, though it still remains to be seen whether the initiative will lead to projects that could directly benefit the Hefei, China-based automaker.
In addition, NIO’s shares also benefited from the company’s launch of its updated battery leasing program last week. Under the new terms, Nio drivers that wish to lease a battery can replace their packs with a higher energy-density alternative daily, instead of months or years later.
While Nio’s introduction of a daily package may pose fresh challenges for the company, its executives are optimistic that the offering can boost revenues by providing enhanced convenience to users and reducing the purchase prices of Nio’s electric vehicles.
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