Today might not have seemed like a fantastic day for electric cars, especially from manufacturers based out of China. Major players are trading down after some unfortunate revelations coming from delivery reports. But if there’s one silver lining, it’s for investors in Nio (NYSE:NIO). The automaker, one of the largest in Asia’s electric vehicle (EV) sector, inked a deal with a widely renowned European sports car manufacturer. As such, NIO stock fans should be cheering today.
Chinese EV stocks traded down in tandem as the effects of the semiconductor shortage appeared to ripple through the East Asian auto market. Companies like Nio, as well as Xpeng Inc. (NASDAQ:XPEV), noted that supply issues were affecting deliveries and will likely show on Q3 earnings reports. Nio even lowered its projected deliveries for Q3 by thousands of vehicles. Meanwhile, U.S.-based EV plays are also trading down thanks to microchip hardships; Lucid Motors (NASDAQ:LCID) is losing over 10% and Tesla (NASDAQ:TSLA) is trading sideways.
NIO Stock Finds Saving Grace in Lotus Partnership
Things could’ve been much worse for NIO stock today, but some optimistic news is softening the blows. The company is signing an investment pact with British sport automaker Lotus. The deal is preceding a huge change to the Lotus business model, and through the partnership, the automakers plan to make Lotus’ entire vehicle fleet all-electric.
The deal saw a $2.3 billion funding round led by Nio’s investment arm, Nio Capital. Through the deal, four new Lotus vehicles will hit the market, beginning next year and going through 2026. The companies will produce these cars at a joint development facility in Wuhan; another facility in China will supplement production, making 150,000 vehicles per year.
This news presents a great future for Lotus, and, if all is successful, it will be a highly lucrative investment by Nio. The deal stands to rocket Lotus ahead of companies like Porsche and Ferrari (NYSE:RACE), who are lagging behind on the switch to an all-electric fleet. As it stands now, Ferrari is promising just its first all-electric vehicle by 2025. Meanwhile, Porsche’s goal is to electrify 80% of its offerings by 2030 — this 80% including hybrid vehicles.