After experiencing a significant setback in 2024, Nio (NYSE: NIO) shares have tumbled more than 50% since the start of this year, leaving many investors wondering whether it is time to cut the losses or whether a turnaround is soon on the cards.
However, the latest trading session on August 29 recorded a 6.49% gain, after which NIO stock closed at $3.94.
Gains of 6.60% extended into pre-market, allowing NIO shares to surpass the $4 threshold, a level they traded below for most of the previous month.
Backing from China proves vital for NIO stock
Chinese stocks represented through American Depositary Receipts (ADRs) rose on August 30 after being spurred by heavy buying activity from sovereign fund Huijin, which is seen as a mechanism through which China as a state acts on the market and provides a necessary economic stimulus to chosen companies.
Through this initiative, the Chinese central government aims to restore their stocks to normal after a four-month decline streak.
Although it is unknown precisely how much the Huijin fund invested, a notable uptick in the NIO stock price signals a sizable investment.
Important delivery milestone as catalyst for NIO stock surge
During the Chengdu Auto Show on August 30, Nio reported that deliveries of its 6-Series SUVs, including models like the ES6 and EC6, have surpassed 300,000 units, an important milestone for the electric vehicle (EV) producer.
Furthermore, NIO revealed plans to expand its charging infrastructure, aiming to cover all 183 counties in Sichuan and 74 in Tibet by June 2025.
Currently, NIO operates 953 charging piles and 93 battery swap stations in Sichuan. Recent changes to the BaaS policy, which reduced battery rental fees, have fueled a rise in deliveries, with monthly averages exceeding 20,000 units.
These positive developments are seen as a continuation of the company’s executives’ efforts to weather the storm NIO stock is currently facing.
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Source: https://finbold.com/heres-why-nio-stock-is-surging/