Stock Market Today, Dec. 30: Nio Rallies on Upbeat Q4 Sales Outlook

Nio (NYSE:NIO), a smart electric-vehicle maker, closed Tuesday’s session at $5.50, up 3.00%. The stock has gained 10.00% in the past five days. Trading volume reached 77.5 million shares, coming in about 32% above versus its three-month average of 52.4 million shares.

Tuesday’s trading featured stronger fourth-quarter sales projections and China’s extended EV trade-in subsidies. Nio IPO'd in 2018 and has fallen 16% since going public.

How the markets moved today

The S&P 500 (SNPINDEX:^GSPC) slipped 0.14% to 6,896, while the Nasdaq Composite (NASDAQINDEX:^IXIC) fell 0.24% to 23,419. Auto manufacturers peers were mixed as investors compared Nio’s stronger Q4 outlook with ongoing competition in premium EVs. Tesla (NASDAQ:TSLA) fell by 1.13% and Li Auto (NASDAQ:LI) gained 0.64%.

What this means for investors

Nio extended its upward streak today as investors reacted to positive sales projections and a Chinese government policy change. Chinese officials announced an extension to trade-in subsidies for electric vehicles. According to Sherwood News, the shift in policy will give consumers up to $2,850 towards a qualifying new vehicle, boosting demand.

Meanwhile, CEO William Li told Chinese media that the company's Q4 vehicle sales will come in above 30 billion yuan (around $4.3 billion). This reassured the market after Nio's Q3 revenue disappointed. The upbeat sales figures come against a backdrop of chip shortages, which are impacting delivery of its new ES8 SUV orders.

Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.