Popular electric vehicle (EV) maker Nio Inc. (NYSE: NIO) rallied around 8% on July 7 after China pledged to extend support to its EV industry.
According to a report published by Barron’s, China may also extend subsidies for new-energy vehicles that were due to expire this year.
The Chinese government will also focus on building charging infrastructure across the country and take initiatives to decrease charging fees.
This development comes as a relief for EV makers, like Nio, who are trying to recover from the after-effects of COVID-induced lockdowns in the country.
Recently, Nio posted impressive delivery numbers for the month of June. It witnessed a 60.3% year-over-year rise to 12,961 vehicles. The deliveries for the second quarter of 2022 also jumped 14.4% year-over-year to 25,059 vehicles.
Performance on TipRanks
According to TipRanks, the Street is optimistic about NIO stock and has a Strong Buy consensus rating based on 10 Buys. NIO’s average price forecast of $33.66 implies 49.6% upside potential to current levels. The stock has lost 32.8% so far this year.
TipRanks shows that financial bloggers are 81% Bullish on NIO, compared to the sector average of 64%.
Further, hedge funds are Very Positive about the stock. As per TipRanks, hedge funds have bought 3.5 million shares of Nio in the last quarter.
Key Takeaway
China’s move to support its EV industry is expected to boost the demand for electric vehicles in the country. Further, Nio seems to be well-positioned to benefit from this spurt in demand.
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