Here's Why Chinese Electric Vehicle Maker Nio Shot Up Today

Shares in Chinese electric vehicle (EV) automaker Nio (NYSE: NIO) soared by more than 14% by 11:30 a.m. ET today. The rise follows the launch of its new premium sport utility vehicle (SUV). Nio is primarily a player in the domestic market in China, and this latest model, which comes with a near 26% discount if bought on a battery-as-a-service (BaaS) basis, is seen as offering EV buyers a more affordable way to purchase a premium SUV.There's an interesting comparison to be made with Tesla here, in that the market is rewarding an EV maker when it releases a lower-cost model, and particularly an SUV. Tesla's SUV Model Y's sales are declining this year in the face of aggressive competition, and the company is responding by releasing a lower-cost Y model later in the year.The issue of cost is critical to companies like Nio and Tesla, because EVs tend to have higher upfront costs, but much lower maintenance and fueling costs than internal combustion engines (ICE). As such, a reduction in the upfront cost to the consumer of an EV has a disproportionate impact on the long-term value of the car compared to the same cost reduction on an ICE car.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool