Chinese electric vehicle manufacturer Nio (NYSE:NIO) enjoyed a strong outing in the market following a near doubling of vehicle deliveries last month. Adding to the positive sentiment, the broader EV sector has witnessed impressive results. Moving forward, though, the focus will be on maintaining momentum. That may not be so easy given global economic challenges.
Earlier this week, Nio announced a record month in June. Deliveries shot up to 21,209 vehicles, representing an increase of 98.1% on a year-over-year basis. Further, the company delivered 57,373 vehicles in the three months ended June. That came out to a 143.9% rise compared to the year-ago period. Cumulatively, deliveries hit 537,020 as of June 30.
In a nod to the sustainability sentiments that underline NIO stock and other EV plays, the Chinese automaker recently released its annual environmental, social and governance report. This document details both initiatives and accomplishments in forwarding a more sustainable future.
Bolstering enthusiasm for NIO stock is the fact that other Chinese EV makers have flourished. In particular, Zeekr (NYSE:ZK) – which is owned by Geely Automobile (OTCMKTS:GELYY) – has been swinging higher off the back of its own record month. In June, the company delivered 20,106 vehicles, bringing its year-to-date count to 87,870.
Sustained Sentiment for NIO Stock on the Watchlist
On the other side of the world, sector giant Tesla (NASDAQ:TSLA) saw its fortunes surge following strong second-quarter stats. During the period, the company produced 410,831 vehicles and delivered 443,956. The latter print beat analyst expectations, which called for deliveries of 439,000 vehicles. Naturally, the bullishness boosted NIO stock.
Nevertheless, the next step for the EV sector is to maintain and grow this momentum. That may be easier said than done. According to the latest ADP report, private payroll growth in the U.S. slipped lower in June, adding 150,000 jobs. Per CNBC, this figure was “below the upwardly revised 157,000 in May and the Dow Jones consensus estimate for 160,000. The total was the lowest monthly gain since January.”
As for the Chinese economy, earlier this year, Reuters reported that China has struggled with structural employment challenges.
Adding a wrinkle to NIO stock and other Chinese businesses, the nation’s Generation Z demographic is witnessing a rise in so-called “revenge saving” – aggressively saving money rather than flaunting wealth. It runs counter to dynamics seen in other countries, potentially impacting economic recovery efforts.
On the date of publication, Josh Enomoto did not have (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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
