What happened
Chinese electric vehicle manufacturer NIO (NIO +3.38%) was in the fast lane in June, climbing 37.8% for the month, according to data provided by S&P Global Market Intelligence. The company is still in early days but is showing encouraging signs of growth, and investors have taken notice.
So what
NIO is sometimes called "the Tesla of China" due to its charismatic CEO, loyal following, and focus on high-end vehicles, and increasingly the company is showing progress that backs up that title. The company early in the month announced its manufacturing partner has begun construction of a second factory near the industrial city of Hefei, which when finished will increase NIO's production capability to about 20,000 vehicles per month.
Image source: NIO.
NIO is also working to expand its portfolio of related products, including its recharging and power accessories. The company announced late in June it would hold a "Power Day" event in July. Investors have come to expect big product announcements from events like this, which likely gave the stock an extra charge.
Wall Street has taken notice. Citigroup's Jeff Chung late in the month raised his price target for NIO's American depositary shares to $72, from $58.30, reiterating his buy rating on what he called "robust shipment volume."
Now what
On the first day of July, NIO confirmed those shipping volumes, saying it had delivered 8,083 vehicles in June and 21,896 vehicles for the entire second quarter. That gives the company nearly 42,000 deliveries in the first half of the year, which is a little short of the 90,000-vehicle target for the year analysts are hoping for. NIO has been ramping up deliveries and had expected second-half growth, but with a chip shortage impacting the entire auto industry it's hard to predict how the second half will go.
For long-term holders, though, the direction is clear. NIO is gaining traction and winning business in its important home market and making plans for international expansion. There is a lot for investors to be excited about with NIO right now.
