Nio Inc. (NIO) stock prices were up by 7.59% shortly after the market trading commenced on June 1st, 2021, bringing the price per share up to USD$41.55 early on in the trading day.
May 2021 Delivery Report
NIO reported having delivered 6711 vehicles in the month of May in the fiscal year 2021, representing a staggering 95.3% growth as compared to the same time period of the prior year. Of the total deliveries, 1412 were deliveries of ES8s, NIO’s proprietary six- and seven-seater flagship premium smart electric SUV. 3017 of the total deliveries were of ES6s, the company’s high-performance five-seater premium smart electric SUV. 2282 of the total deliveries were EC6s, NIOs proprietary five-seater premium smart electric coupe SUV.
Pushing for Growth in Deliveries
This is despite the company reporting its vehicle delivery being negatively affected for several days on account of the continued volatility of the semiconductor supply chain, as well as certain logistical adjustments needing to be made. As per the existing production and delivery plan, NIO anticipates being able to accelerate the delivery in June to make up for the deliveries comprised during May. The company has maintained and reiterated the delivery guidance it disclosed for the upcoming second quarter of the fiscal year 2021, with 21000 to 22000 deliveries being expected.
The company announced on May 24th, 2021 that it had entered into a manufacturing agreement with each of Jianghuai Automobile Group (JAC) and Jianglai Advanced Manufacturing Technology (Anhui). The agreement is in regard to the joint manufacturing of NIO vehicles and associated fee arrangements.
Joint Manufacturing Venture
JAC is a state-owned frontrunner of the automobile manufacturing industry in China and manufactures several NIO vehicles in delivery. The manufacturing takes place at the Hefei JAC-NIO manufacturing plant. Meanwhile, Jianglai is a joint venture that facilitates the management of operations established by JAC and Nio, with NIO holding 49% of equity interests.
Details of Agreement
As per the agreement, May 2021 to May 2024 will see JAC continue to manufacture several of NIO’s automotive offerings from its pipeline. Furthermore, JAC will expand its annual production capacity, calculated on the basis of a 4000-hour work-year, to 240,000 units as a way of meeting the increasing demand for NIO vehicles.
Future Outlook for NIO
Armed with a tenured production agreement for the foreseeable future, NIO is poised to capitalize on opportunities it comes across the usher in further growth. Current and potential investors are hopeful that company management will leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.