NIO (NYSE: NIO) Shares Just Received an Upgrade From the Chinese Politburo

NIO (NYSE:NIO), a leading manufacturer of electric vehicles in China, has suffered a significant correction in the stock market place over the by few weeks amongst fears of a broad-ranging regulatory crackdown on its home turf. However, the top echelons of China's politburo take at present sought to calm down these rampant fears, setting the stage for a reversal in NIO'due south prevailing stock toll trajectory.

To wit, Red china'southward Vice-Premier, Liu He, addressed the Digital Economy Expo in Hebei province on Mon via a video link. In his address, the Vice-Premier acknowledged that the private sector must be offered "vigorous" support while noting:

"In that location are no changes in the principles and policies for supporting the development of the individual economy; they have not changed now and volition not alter in the future."

Deport in mind that the shares of NIO and other prominent Chinese companies have taken a hitting in recent weeks as Prc'south regulatory crackdown, initially focused on violations of data security rules at firms such as Alibaba (NYSE:BABA) and Didi, adopted full-fledged revolutionary overtones. The saga began a few months back when Chinese authorities forced Alibaba'south Jack Ma to cancel the IPO of the fintech visitor Emmet Grouping. Mr. Ma has not been seen in public since that turbulent time. In recent weeks, the roving eyes of Chinese censorship have settled upon various targets, ranging from the ride-sharing company Didi – which saw its app banned in the land for illegal data harvesting – to the private later on-schoolhouse tutoring firms.

China'south President, Eleven Jinping, added to these concerns when he called for "common prosperity" in China, seeking to narrow the growing gap between the haves and the have-nots. Nonetheless, perhaps in recognition of the irreversible damage being inflicted on Prc's economic prestige equally a consequence of these actions, the country's politburo has sought to calm down some of the more than ambitious fears of investors. Of grade, this week'southward comments by the Chinese Vice-Premier plant the clearest sign however that the ongoing, largely tech-focused crackdown would not aggrandize in scope. It is hardly surprising, therefore, that shares of NIO and other Chinese companies that are listed on The states stock exchanges accept now started to migrate upward. For example, shares of both NIO and Alibaba accept recorded gains of around 6 per centum over the past five trading days.

We have repeatedly noted that NIO enjoys a particularly shut relationship with Chinese authorities. For instance, NIO has entered into a strategic partnership with the Heifei municipal government to construct the gigantic NeoPark, a 16,950-Acre industrial park that aims to localize the entire EV supply chain. Moreover, back in 2020, NIO had received sizable liquidity injections from a consortium of state-backed funds, collectively known as the Heifei strategic investors. In another striking example, NIO signed a strategic agreement on the 26th of July with Guoxing Auto Service Center in Beijing. The agreement paves the manner for NIO to provide EVs to Chinese government agencies also every bit other quasi-official institutions. Consequently, given the lengths that the Chinese country machinery has gone to make NIO a viable competitor to Tesla (NASDAQ:TSLA), it is unlikely to confront a fate similar to that of Didi, and whatsoever fears in this regard remain unfounded.

$NIO will reportedly launch its second sedan, the ET5, at NIO Mean solar day 2022. The rumored price of the vehicle is around RMB 300,000 (~ $46,500 USD).

— Stock Talk Weekly (@stocktalkweekly) September seven, 2021

In another positive development, NIO is now widely expected to launch a companion to the ET7 sedan in a affair of few months. As per multiple reports, the ET5 sedan is now scheduled to be unveiled at the upcoming NIO Day 2021 event.

As a refresher, NIO's ET7 sedan has a drag coefficient of 0.23 and a range of over 1,000 km with the newly introduced 150-kWh battery pack. The EV retails for effectually $seventy,000 earlier the application of subsidies, and its deliveries are slated to begin in Q1 2022. Bear in mind that NIO users can too rent the batteries under the Bombardment-as-a-Service (BaaS) facility, thereby significantly slashing the overall purchase cost in favor of a monthly subscription fee. Against this backdrop, the rumored ET5 sedan is expected to be priced at around RMB 300,000 ($46,500).