Highly followed Chinese electric vehicle maker Nio (NIO -5.43%) is making an unusually large move in the market today. With the trading volume of its American depositary shares (ADSs) already at 75% of its daily average at 11:45 a.m. EDT, shares were up 4.3%. The stock was up 5.5% earlier on Friday at its highs of the day.
Nio has been working on expansion plans as it anticipates growing demand in China and elsewhere. It has opened a division in Norway and made its first shipment outside of China there. The company has further plans to expand into Europe. That growth was to be helped by a new factory being built with its manufacturing partner JAC Motor. Construction began on April 29 on a new industrial park in collaboration with the city of Hefei, China.
The park is to include the new factory, and is said to double the company's capacity to 240,000 vehicles annually. Nio told Reuters today that with added shifts, the company's total capacity could actually jump to 300,000 vehicles per year, and that it has completed one phase of the expansion, as reported by Yahoo! Finance.
Investors are excited about that expansion, and recent news from competitors indicates the market for EVs in China remains quite robust. Tesla's Shanghai factory set a monthly production record in September, and more than 70% of those vehicles were sold within China.
Today, Ford reported that year to date, its sales in China have reached almost 457,000 units, up 11% versus the prior-year period. That compares to a drop of 7% globally through September.
Nio has been counting on a growing market in China for new energy vehicles. There is now mounting evidence that this is happening. With its expansion plans progressing, and the establishment of its business in Europe, investors are starting to get a feel for how the company can grow into its expectations.