Rising EV Sales Accelerate Tesla and Nio

What’s happening: Shares of NIO Inc. and Tesla, Inc. jumped on Thursday after both electric vehicle manufacturers reported strong delivery numbers.

What happened: Chinese electric vehicle manufacturer NIO reported a record monthly performance for June, with deliveries almost doubling on a year-over-year basis.

Despite the robust sales data from NIO, Tesla continues to dominate the EV market in China. The Silicon Valley-based company surpassed NIO’s sales by a massive margin and continued its stock rally after beating sales estimates for the second quarter.

Why it matters: Most automakers around the world are struggling to ignite their sales momentum, even with deals and discounts to attract buyers. General Motors last week reported a 34% decline in its Q2 sales, while Fiat Chrysler’s sales plunged 39%. Toyota Motor’s sales nosedived 86% in May.

Meanwhile, Tesla’s stock surged to another record high of $1,228 on Thursday after the company reported deliveries of around 90,650 vehicles for the second quarter, easily exceeding the estimate of 72,000 units.

The deliveries included 80,050 Model 3 and Model Y vehicles, with Model S and Model X accounting for 10,600 vehicles. Despite its Fremont, California plant being closed for most of the quarter, Tesla still produced 82,000 vehicles.

The Shanghai-based automaker, NIO reported stronger-than-expected sales for June and the second quarter. The company’s American depositary shares jumped to a new 52-week high on Thursday after the company reported a 179% jump in its June deliveries.

The company delivered 3,740 vehicles last month, including 2,476 of its small SUV ES6s. For the second quarter, NIO’s vehicle deliveries surged 190.8% year-over-year to 10,331 units, exceeding its own guidance of 10,000 units.

Despite strong sales results, NIO continues to be far behind Tesla, the sales of which are almost 9 times higher than the Chinese company.

How shares responded: Tesla’s shares jumped 8% to close at $1,208.66 on Thursday, after hitting another record high of $1,228.00 earlier in the session. The company’s stock has jumped around 166% over the past three months. NIO’s shares climbed 18.6% to close at $9.38 on Thursday, adding a whopping 292% over the past three months.

What to watch: Although Tesla is way ahead of NIO, investors are highly optimistic about the Chinese company’s prospects. With countries and consumers becoming more environment conscious, the sales of electric or hybrid vehicles are expected to grow significantly.

US stocks will be in focus today, as markets reopen after a long weekend.

Context: US stock markets closed higher on Thursday, after giving up most of the initial session gains, as investors worried about a record surge in new covid-19 cases in states like Florida.

Details: Wall Street remained closed on Friday for the Independence Day extended weekend.

Investors hesitated from driving stocks sharply higher despite the strong jobs report, after Florida witnessed a record spike of 10,000 new covid-19 cases in a single day. The US added a record 52,000 new infections on Wednesday.

News of a delay in the final-stage trial of Moderna’s covid-19 vaccine candidate also hurt investor sentiment. Shares of Moderna dropped around 4.9% following the report.

After spiking in early indices trading, the Dow Jones index closed higher by only 92.39 points at 25,827.36 on Thursday, while the S&P 500 rose 0.5% to 3,130.01.

After surging as high as 10,310.36 earlier in the session, the Nasdaq 100 closed at another record high of 10,207.63 on Thursday, booking a gain of 0.5%. The Dow Jones index booked a gain of 3.3% for the holiday-shortened week, while the Nasdaq 100 recorded a 4.6% weekly surge.

Shares of Lemonade jumped close to 140% in its public debut on the NYSE on Thursday after the mobile insurance company priced its IPO at $29 per share.

What to watch: Investors await services PMI, composite PMI and ISM non-manufacturing PMI data from the US. The IHS/Markit US services PMI is expected to rise to 46.7 in June, from 37.5 in the previous month, while the composite PMI is likely to rise to 46.8, from a reading of 37 in May. The ISM non-manufacturing PMI, which climbed to 45.4 in May, is projected to spike to 49.5 in June.

Investors will also continue to assess the daily coronavirus numbers, with the US reporting more than 2.8 million cases so far.

Other Markets: European indices were trading higher at 8:30am GMT, with the FTSE 100, French 40 and Dax 30 index up by 2.3%, 2.2% and 2.3%, respectively.

Spain's consumer confidence indicator and Bank of Canada’s business outlook survey.