Nio's stock jumps after report of China's plan to boost EV sales

By Tomi Kilgore

Shares of other China-based EV makers also bounce on subsidy plan, but Tesla's stock pulls back

Shares of Nio Inc., and those of other China-based electric-vehicle makers, powered higher Friday, after a report that China reportedly plans to provide car owners with an incentive to buy EVs.

The move comes as EV makers have been cutting prices in China in an effort to jumpstart demand, which has been trending down.

Nio's stock (NIO) rallied 7.8% in morning trading. It has run up 17.1% this week, which puts it on track for the biggest weekly gain since it rocketed 39.3% during the week ending July 28, 2023.

China plans to pay car owners up to 10,000 yuan, or nearly $1,400 at current exchange rates, if they replace their cars with electric or hybrid vehicles through the end of this year, according to a report in The Wall Street Journal.

China will also provide a subsidy of 7,000 yuan to people who trade in older cars for traditional cars with engine sizes at or below 2.0 liters, the WSJ report said.

Among shares of other China-based EV makers, Li Auto Inc.'s (LI) charged up 7.2%, to bounce off Thursday's 11-month closing low, and Xpeng Inc.'s (XPEV) surged 10%, and was headed for the best weekly performance (up 12.3%) in nearly six months.

BYD Co. Ltd.'s U.S.-listed shares (BYDDY) got a 3.9% bump, and has risen 7.6% amid a three-day win streak.

Meanwhile, shares of Tesla Inc. (TSLA) fell 0.8% Friday. It was up 14.8% this week, which would be the biggest weekly gain since January 2023, as Wall Street cheered the EV giant's first-quarter report. Of Tesla's first-quarter revenue of $21.30 billion, $4.59 billion, or 21.6%, was from China.

Don't miss: Tesla's December recall of 2 million vehicles over Autopilot now subject of regulatory probe.

The plans for a subsidy come at a time when U.S. Secretary of State Antony Blinken met with China's President Xi Jinping to work out a number of issues between the superpowers, including trade.

Also read: TikTok's potential ban is signed by Biden. Here's what comes next.

-Tomi Kilgore

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04-26-24 1053ET

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