After rising steadily all week, Nio (NYSE:NIO) stock is inching close to pulling itself out of penny stock territory.
Today, the Chinese electric vehicle (EV) producer is up on the news that it is making progress regarding its semi-solid-state battery packs. As EV demand has waned, Nio has shifted focus toward its charging and EV battery operations. This strategy appears to be paying off. NIO stock is up today as the company opens its new battery technology to the Chinese public and gets ready for the official full rollout, scheduled for after its May trial run.
Does this mean that NIO stock is finally going to pull back into the green and remain above the $5 line? Given the progress Nio has made lately and the clear strength of China’s financial markets, it certainly seems possible. Let’s take a closer look at this news and assess how it is likely to impact share prices in the long and short term.
What’s Happening With NIO Stock
It’s been a good week for NIO stock, and the momentum isn’t slowing down today. As of this writing, shares are up 1.6% for the day and look poised to continue trending upward. This recent display of strength has pushed Nio into the green for the month, a feat that would have seemed unlikely a few weeks ago. Although its turnaround may be slow, it seems to be fairly steady, even if some experts haven’t acknowledged it yet.
This recent development should help reassure investors that Nio is making progress and mounting a gradual comeback. The company began production on its solid-state battery packs less than one month ago, and it is already delivering them to the public. As Electrek reports:
“In late 2023, WeLion delivered the 360 Wh/kg semi-solid-state batteries to NIO, ahead of the expected delivery of the cells in mass quantities by April 2024. As we reported earlier this month, NIO officially kicked off mass production in China, and the semi-solid-state cells from WeLion have undergone testing at battery swap stations in Shanghai and Chengdu.
Today, NIO announced it will soon open up the technology to certain battery swap customers overseas as a trial period ahead of full solid-state integration.”
If the trial period goes well, and there’s no immediate reason to assume it won’t, NIO stock will be in an excellent position to rebound as the EV market continues its gradual recovery and demand for electric vehicles rises again. China has plenty of EV producers but Nio has managed to hold its own so far. Now, its battery packs stand to give it a competitive edge over rivals.
Nio’s Road Ahead
On Nio’s Weibo (a Chinese social media platform similar to X/Twitter) page, the company states that consumers will be able to access Nio’s semi-solid-state packs for the entire month of May 2024, allowing them to take advantage of and appraise this new technology. This will likely create some positive momentum for NIO stock as customers become familiar with its latest offering. Electrek adds that: “Customers who rent a NIO BEV for at least three consecutive days in May will be the first to have the opportunity to test the new technology.”
This could be exactly the catalyst NIO stock needs to continue its gradual trek out of penny stock territory and back to its place among China’s EV leaders. The company has the dynamic reach to rival larger automakers. It just needs to remind investors why they shouldn’t count it out.
On the date of publication, Samuel O’Brient did not hold (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.
