Chinese electric vehicle (EV) producer Nio (NYSE:NIO) is giving an unexpected boost to a penny stock today. Indeed, the automaker recently announced a partnership with auto insurance platform company Cheche Group (NASDAQ:CCG). This news hasn’t done much for NIO stock, but CCG stock is having an excellent day. After months of steadily trending downward, the microcap penny stock definitely needed a catalyst, too.

Now, Cheche may be on the verge of a turnaround as it takes steps to collaborate with automakers in the new energy vehicle (NEV) space. While Nio shares may be struggling today, based on CCG, the market still seems to be reacting well to the partnership news.

What’s Happening With NIO Stock?

After a volatile week and an even more unstable month, Nio hasn’t given investors much cause for optimism. As of this writing, NIO stock is down more than 2% for the day. On the other hand, CCG stock is up about 15% and looks primed to keep rising. If the stock keeps advancing, this penny stock — which currently trades at around 85 cents per share — could make it back to the $1 mark.

With this type of performance, it’s easy to see why the insurance platform firm is focused on expanding its reach through NEV maker partnerships. Cheche Group founder, CEO and Chairman Lei Zhang issued the following statement about the partnership:

“The global NEV industry continues to experience substantial growth led by the Chinese NEV manufacturers […] As a trusted service provider for NEV insurance services, we are committed to creating value for NIO and our other partners throughout the product lifecycle and will strive to retain our standing as the leading intelligent insurance platform for NEVs in China.”

CCG stock came public through a special purpose acquisition company (SPAC) merger back in September 2023. After falling sharply following its trading debut, the stock has struggled to garner any serious momentum. But simply by partnering with Nio, CCG is finally back in the green, even as NIO stock continues to struggle.

What It Means

Does this partnership mean much for Nio? As of now, it doesn’t seem to. The Chinese EV producer has been struggling for weeks without displaying any sustainable growth. Granted, some of this has been due to tariffs on multiple fronts. The European Union recently announced tariffs on Chinese imported EVs that could go as high as 38%. In the United States, President Joe Biden is levying similar tariffs against China. Likewise, former President Donald Trump has promised to impose additional policies if he is reelected.

Even before these proposals started making headlines, though, NIO stock still didn’t have a ton going for it. A disappointing first-quarter earnings report only cast more doubt over the firm’s growth prospects.

Ultimately, this partnership is likely to do more for Cheche than for Nio. The Chinese EV market is fiercely competitive and Nio is up against some much larger rivals. But Cheche is working on simplifying the auto insurance process for consumers. If it can continue to further its reach, CCG stock could finally rise above the penny stock line and stay there — whether or not Nio’s troubles persist.

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.