What happened
The share price of the Chinese electric vehicle (EV) maker Nio (NIO 6.26%) was soaring today after The Wall Street Journal reported that China might start easing its strict zero-COVID policies.
The restrictions have resulted in many companies, including Nio, having to temporarily close factories or stop production when a COVID-19 outbreak occurs.
The Journal also reported that U.S. inspectors are finishing up their audit of some U.S.-listed Chinese companies, and investors are hoping that the potential for some Chinese companies to be delisted from U.S. exchanges could soon be eliminated.
As a result of all the news, Nio's stock jumped 14.2% as of 2:23 p.m. ET on Friday.
So what
According to the Journal, Zeng Guang, the former chief scientist at the Chinese Center for Disease Control and Prevention, said at a conference that there soon could be significant changes to China's zero-COVID policies.
Image source: Nio.
While the government hasn't officially announced a rollback of its policies, there have been increasing rumors that China is getting close to easing its restrictions.
If it does, that would be welcome news for Nio investors after the EV maker has faced several production slowdowns because of pandemic-related regulations. Two Nio factories were forced to temporarily stop production as recently as this week because of the COVID policies.
Nio reported its latest vehicle delivery numbers earlier this week, and while they increased 174% from the year-ago quarter, they were down from September's numbers. Investors hope that if the COVID restrictions are reversed, or at least eased, vehicle deliveries could continue to increase.
Now what
Investors might also be pushing Nio's stock higher today after the Journal reported that U.S. officials have finished their audit of some Chinese companies.
The U.S. government has threatened to delist specific Chinese companies from U.S. exchanges if they don't comply with certain auditing requirements.
That's added to Chinese companies' share-price woes lately, but with U.S. officials nearing the end of their audit, investors are hoping that the access China has given the U.S. to companies' financial records will keep stocks from being delisted.
With all of this news, it's not surprising to see Nio's share price climbing today. But investors will get a clearer picture of how Nio is doing when the company reports its third-quarter results on Nov. 10.
