What happened
Shares of Chinese electric vehicle (EV) maker Nio (NIO 11.65%) spiked more than 10% Friday morning after the company reported its August vehicle delivery figures. After rising as much as 10.5%, Nio's American depositary shares pared some of that gain and were trading higher by 7.5% as of 12:45 p.m. ET.
So what
The initial spike was likely a sign of relief that consumers in China continue to spend -- at least on new EVs. Nio reported this morning that it delivered more than 19,000 vehicles in August. That's less than the record 20,462 it reported in July, but August still marked its second-best month ever.
Now what
Nio shares soared after the company announced its record July sales. But concerns about economic conditions in China tempered that run in the share price. When the company reported its second-quarter results earlier this week, it guided investors to expect third-quarter deliveries of between 55,000 and 57,000 units. That would represent a jump of more than 80% versus last year's third quarter at the high end. But the market grew skeptical as concerns grew over China's ability to spur consumer spending and economic growth.
Today's news helped ease those concerns. In the first two months of the current quarterly period, Nio has shipped nearly 40,000 EVs, which is more than 90% above the comparable period last year. So it now doesn't seem to be a stretch for Nio to beat its recent third-quarter guidance. It would only need to deliver 17,209 vehicles in September to beat the high end of its guidance.
That seems very achievable after what it reported in the last two months. That has investors getting optimistic about Nio's future prospects once again today.
