What happened
With the market favoring higher-growth -- and riskier -- electric vehicle (EV) names Wednesday, two high-profile stocks gained ground. Shares of Chinese EV maker NIO (NIO +5.50%) and aspiring electric semi-truck maker Nikola (NKLA +0.00%) closed the session up 6% and 3.9%, respectively. But on the day before its merger with Lucid Motors is expected to close, shares of Churchill Capital IV (CCIV +0.00%) slid by 3.5%.
So what
There was no company-specific news out from either NIO or Nikola Wednesday, but both have been making progress on plans to grow their respective businesses. And in what might be a case of "sell the news," Churchill Capital's decline came after the stock soared by almost 190% in the first half of 2021. A special meeting of shareholders will be held Thursday at which it is expected that they will approve the highly anticipated merger with EV maker Lucid Motors.
Lucid Air luxury electric sedan. Image source: Lucid Motors.
Now what
Though nothing specific explains its stock move Wednesday, NIO continues to steadily expand its business. Earlier this year, it announced a three-year agreement extension through May 2024 with its state-owned manufacturing partner, Jianghuai Automobile Group (JAC), that will allow JAC to continue manufacturing NIO's SUV models as well as its new ET7 luxury sedan and potential future models.
Demand for the company's vehicles continues to grow. Even with the global semiconductor shortage affecting production, the company delivered more than twice as many vehicles in the month of June and in the second quarter as it did in the year-ago periods. The new manufacturing agreement extension will address its needs by doubling current capacity to about 20,000 vehicles per month or 240,000 annually.
Nikola continues to make progress on its first domestic manufacturing plant in Arizona. Its initial batches of semi-trucks were produced at a partner's plant in Germany. Those Tre battery-electric trucks have been shipped to the U.S. for testing and commissioning activities. Last week, Nikola also announced partnerships with five new independent dealers. The move is intended to continue growing the number of Nikola sales and service locations nationwide as it nears the launch of its first battery-electric vehicles. Hydrogen fuel-cell electric vehicles (FCEVs) should follow those initial models to market.
Lucid isn't manufacturing vehicles yet, but it recently said that due to strong demand, it is accelerating plans for capital investments to grow its manufacturing capacity. Its first product, the luxury Lucid Air sedan, is expected to be the first commercial EV to have a battery range of over 500 miles per charge. Reservations for the Air's Dream edition are sold out, even with a sale price of $161,500 after expected tax credits.
NIO and Nikola shares moved with the market sector Wednesday. But investors will be watching the Churchill Capital vote on the Lucid merger. If stockholders approve the transaction as expected, it will begin trading on the Nasdaq under the symbol LCID.
