What happened
Friday's market session was a bumpy one for Chinese electric-vehicle (EV) maker Nio (NIO +3.16%). At various points, Nio shares were down over 2% and up 1.5% today before closing the final session of the week up 0.65%.
So what
There wasn't any company-specific news from Nio today. It does have a high-profile event coming next week with its Nio Day, and that may have helped to keep trading active and ending on a high note. But it also might be something else in the EV sector that caught investors' attention.
Image source: Getty Images.
A focus in the EV sector came on this side of the world yesterday with shares of Lucid Group dropping on news of a capital raise. That company gave investors more details on its plans today, and the stock recovered some of yesterday's losses. Lucid will raise upwards of an additional $2 billion to bring its cash hoard to nearly $7 billion. That makes sense for a company that has just begun production and will need to spend capital to ramp up. But that may also have made some investors realize what a good position Nio is in with its own balance sheet.
Now what
As of Sept. 30, 2021, Nio had about $7.3 billion in cash, cash equivalents, and short-term investments. Lucid may be working on delivering its first 100 electric vehicles, but Nio delivered almost 25,000 EVs in its third quarter alone. By comparison, Nio looks like it's in fine shape financially as it continues to ramp up production.
Its Q3 deliveries were limited due to downtime necessary to upgrade its manufacturing lines and prepare for production of the new ET7 sedan, which it plans to begin shipping early next year. Nio already has the cash on its balance sheet that Lucid -- a highly regarded stock -- is working to gain, even though Lucid seemingly has much more spending to do to reach Nio's level of production.
That reflects well on the Chinese EV maker as it expands sales into Europe this year and next. It also might help explain why investors pushed the stock to end the week on a high note.
