Electric vehicle (EV) manufacturing is ramping up worldwide. Yesterday, President Joe Biden met with some of the largest auto manufacturers in the world regarding EVs. China is planning on ramping up EV production. Lucid Motors (NASDAQ:LCID) will be stepping into the production phase of its flagship model this year. And now, other companies are shifting to begin their own EV-centric businesses. Among those is Kaixin Auto Holdings (NASDAQ:KXIN), and KXIN stock is booming from the news.
Kaixin Auto is a company that has made a name for itself as a dealer of used and new cars in mainland China. The company struggled through 2020 as far as earnings went. And, it failed to deliver details on its promised acquisition for months on end. That acquisition finally surfaced in April, when it revealed Kaixin would be buying Haitaoche Limited. This is allowing the company to expand into e-commerce and EV sales.
KXIN Stock Rockets on EV Production Plan
The company is making a major pivot as the landscape of auto sales changes rapidly. Chinese media is reporting on a new, huge source of energy for industrial purposes. This energy is what was originally being sapped by cryptocurrency mining in the country, which the Chinese Communist Party (CCP) is cracking down on heavily. Now, with over 50 terawatt-hours of electricity available in the absence of crypto miners, the country hopes to channel the energy in climate-conscious industrialization.
Specifically, China’s Guizhou province will be able to take advantage of this energy. It will be constructing 4,500 EV charging stations with the excess power. The announcement reiterates the nation’s — and the world’s at-large — intent to focus on electric vehicles. Kaixin’s shift comes from this mindset.
Kaixin is saying today through a press release that it will be moving into the research, development and production of its own electric vehicles. This new business model will put Kaixin next to major Chinese EV players Li Auto (NASDAQ:LI), XPeng (NYSE:XPEV) and Nio (NYSE:NIO), which is now beginning to expand its reach outside of China.
The news is allowing KXIN stock to pull off some big gains today. The stock is up nearly 51% today. Additionally, trading volume is through the roof. 172 million shares are trading, much higher than KXIN’s daily average of just 545,000.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.