Shares of the Chinese electric vehicle (EV) maker Nio (NIO 0.17%) hit the gas today as investors processed the news that China is implementing a tax cut for new car purchases and that the government will offer a cash subsidy for people who buy a battery-powered car. Additionally, a positive analyst's note about the company could be boosting investor sentiment.
The EV stock was up by 5.9% as of 11 a.m ET.
China's economy has been hurt by the country's strict "zero-COVID" policy, which has caused many cities and factories to shut down. To help give the economy -- and some EV companies -- a boost, the Chinese government is reportedly offering $1,500 to consumers who move from a gas-powered car to an electric one, according to Barron's.
China is also looking to implement tax cuts for new car purchases, of either gas-powered cars or EVs, which could potentially help increase sales for Nio.
And finally, investors were likely paying attention to the fact that Morgan Stanley added Nio to its list of "tactical ideas" today and believes its share price has the potential to climb based on subsidies and the lifting of COVID-19 restrictions.
It's not a big surprise that Nio's stock is rising today on all of this news. The company's share price has taken a huge hit over the past six months as investors have grown concerned about the economic impact of shutdowns in China.
It appears that the Chinese government is trying to help stimulate its economy to offset some of the negative effects of its COVID-19 policies and Nio investors are eager to see some good news as the company gears up to release its latest financial results on June 9.