What happened

It's been a turbulent week for the stock of Chinese electric vehicle maker Nio (NIO -0.76%). After rocketing more than 21% higher on Wednesday, shares dropped nearly 6%, even after the company reported strong November deliveries. But the stock is soaring again Friday, up 7.6% as of 2:40 p.m. ET. 

So what

Stocks of China-based companies soared this week as investors sensed the Chinese government would carefully adjust its strict COVID-19 policies to at least partially assuage protestors. The resulting surge in Nio shares on Wednesday probably muted the reaction investors had to the company's reporting record November deliveries one day later. Now that the dust has settled somewhat, investors may be thinking that Nio's business has turned the corner with more record production ahead. 

A gold Nio ET5 electric sedan.

Image source: Nio.

Now what

It's not just the record 14,178 vehicles the company shipped last month getting investors excited. Nio's guidance for fourth-quarter deliveries implies the company will blow away last month's record even at the low end of the range. 

Nio said it plans to deliver between 43,000 and 48,000 electric vehicles during the fourth quarter. That means December would result in a record of between 18,763 and 23,763 vehicle shipments. That's the kind of accelerating growth investors want to see. 

With Nio shares still down nearly 60% year to date, some investors may be trying to take a position as the production growth surge materializes. There are still plenty of risks related to competition, macroeconomic conditions, and the potential for future COVID-19-related headwinds. If the company can navigate the current environment, though, the stock could follow the jump in production and sales Nio is experiencing.