What happened
Shares of Chinese electric-vehicle manufacturer NIO (NIO +1.61%) were up 13.3% as of 12:30 p.m. EDT Wednesday despite a lack of company-specific news. Rather, it seems today's rise can be credited to NIO's U.S. counterpart, Tesla (TSLA 5.46%), which announced record second-quarter vehicle production and deliveries yesterday after the market closed.
So what
To be clear, there were no new press releases, news reports, regulatory filings, or analyst notes that might otherwise have driven today's move. But as of yesterday's close, NIO stock had also plummeted nearly 70% since early March after the company posted disappointing fourth-quarter 2018 results and followed with underwhelming full-year 2019 guidance. Then with its May 2019 monthly delivery update early last month, the company highlighted concerns for "the challenging macroeconomic and Chinese auto market backdrop," driven by a combination of a cyclical slowdown in China's auto market, Chinese regulators' decision to phase out electric-vehicle subsidies, and broader macroeconomic issues stemming from an escalating trade war between China and the United States. And NIO's subsequent recall of almost 5,000 electric SUVs last week over potential battery fires certainly did the company no favors.
IMAGE SOURCE: GETTY IMAGES.
All told, Given Tesla's indication of surprisingly strong demand for the EV market -- and even though much of that demand came from U.S. consumers -- it was hardly surprising to see NIO bounce in response today.
Now what
Tesla's strength may not necessarily translate to improved results for NIO in the coming quarters. But it undoubtedly spurred hope among bullish investors that NIO's impending quarterly results could demonstrate similar outperformance.
However, barring a positive update between now and NIO's next quarterly report (slated for either late August or early September), investors will need to hurry up and wait for fresh color to that end.
