Electric vehicle (EV) producer Nio’s (NYSE:NIO) stock is up today on good news from China’s government. Chinese stocks have been rising all week as rumors of easing lockdown measures continue to abound. Investors have long been hoping to see China’s government begin easing zero-Covid restrictions and they may get their wish soon. Large Chinese cities Guangzhou and Chongqing have announced plans to start curbing extreme Covid-19 prevention measures.
This news has generated positive momentum throughout China’s financial markets, pushing many stocks up in the process. NIO stock has been one of the top performers today. It has been an excellent day for other Chinese EV stocks as well, demonstrating sector-wide momentum.
Let’s take a closer look at the forces driving Nio up today.
What’s Happening With NIO Stock
As of this writing, NIO stock is up more than 20% for the day and continues to trend upward. It shows no signs of slowing down after a day of steady growth. Today’s performance has set Nio up to close out a highly volatile month in the green. Much of the turbulence that pushed it down has been driven by China’s lockdown measures that have constrained manufacturing across the country and negatively impacted investor sentiment.
If today’s news is any indication, though, China may be on the verge of turning a new corner. With geopolitical headwinds consistently turning international investors away from Chinese companies, it hasn’t been an easy year for NIO stock or its peers. But with protests raging across China, the country’s leaders may finally be realizing that it needs to roll back its zero-Covid policies and let things return to business as usual. When it does, Nio will have plenty to interest investors as it grows its market share in China and considers opportunities abroad. As InvestorPlace contributor Chris MacDonald notes:
“As long as the company continues to grow its brand in China, Nio stands to become a leading brand in what is the world’s largest EV market. International expansion isn’t out of the question either, with the company putting forth plans to expand in the European market.”
The lockdown restrictions easing isn’t the only good news this week. Nio recently announced a partnership with Chinese tech conglomerate Tencent Holdings (OTCMKTS:TCEHY). According to CNBC, the two companies will be producing high-precision mapping systems for Nio drivers. Additionally, Nio will make use of Tencent’s cloud computing tools for data storage in its quest to perfect antonymous driving. Training an algorithm for driverless technology requires significant real-time data processing. This partnership will grant Nio a unique opportunity to make progress in that area, giving it an edge over competitors like Tesla (NASDAQ:TSLA) that are still lagging in the driverless race.
Nio’s Future Prospects Are Looking Up
All told, the recent progress from NIO stock should be seen as an indicator of positive things to come in the new year. Like most Chinese stocks, it has suffered due to severe lockdown policies but the tides seem to be shifting. As InvestorPlace contributor Faizan Farooque highlights, Nio is focused on producing more new EVs and continuing its ambitious growth plans across European markets. Every step will help this company advance further and overtake its EV rivals.
Experts predict that EV stocks to soar in 2023 and when they do, Nio will be among them.
On the date of publication, Samuel O’Brient did not hold (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.