But with the EV pioneer valued above $1trn today, I think it’s fair to assume that Tesla returns will be far less dramatic in future. Investors have probably missed the battery-powered boat when it comes to life-changing gains there.

But what about NIO (NYSE:NIO)? The firm gets called the ‘Tesla of China’, owing to its similarities in the premium EV segment. In New York, it has a far lower $15bn market cap, and has just reported its first-ever quarterly profit.

Might this one emulate Tesla’s incredible wealth-making success?

Similarities

Up by around 110% in the past year, NIO stock has already made some savvy investors solid returns. But over five years, it’s still down by 83%, while Tesla has gained roughly 55% (both in US dollar terms).

Looking at NIO, I do see some similarities to Elon Musk’s EV firm. First off, they’re both very innovative, with NIO building out its own battery-swapping stations. There, subscribing customers can swap a battery for a new one in just three minutes on average.

February saw NIO achieve a milestone of 100m battery swaps. According to the firm, these have saved users a total of 83.41m hours, averaging over 88 hours per user, compared with conventional EV charging. 

There are now 3,790 NIO battery-swap stations worldwide, with around a third on major highways in China.

Interestingly, the company is opening up its network with other EV firms, which reminds me a little bit of Tesla opening up its Superchargers to rivals. Both were built to address range anxiety (still an obstacle to wider EV adoption).

Meanwhile, NIO has finally swung to a profit after years of losses (like Tesla). In Q4, it reported a net profit of RMB 282.7m (about $40m), a vast improvement on the year before. Revenue surged 75.9%, boosted by new and refreshed models.

Finally, NIO is big on AI, with its vehicles having a physical AI companion (NOMI) on the dashboard. Obviously Tesla is all-in when it comes to this technology (robotaxis, humanoid robots, and what not).

Differences

That said, I think AI gets to the heart of the difference between NIO and Tesla. The latter has always been valued on being more than an EV maker, especially today as it moves closer towards mass-manufacturing robotaxis and robots.

Also, back when these projects were still twinkles in Musk’s eye, Tesla had much of the EV market to itself. There was far less competition and its international growth was largely unimpeded, including in China.

In contrast, NIO is likely to face significant trade barriers in the US and Europe moving forward. And it’s likely to always be valued as an EV maker rather than transcending the category like Tesla has.

Another key difference is the discount that investors place on Chinese stocks because of geopolitical risk. At any point, Beijing can change the rules of the game, sending investors fleeing for the exit.

As such, I don’t see NIO as the next Tesla. The stock could still do well, especially if NIO becomes consistently profitable.

But neither is on my buy list today. I see better growth stocks elsewhere for my portfolio.

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However, I’m a long-term investor, so I’m interested in the company’s underlying fundamentals. And while impressed with NIO’s innovative EVs and sales growth, I’ve always been wary due to the company’s ongoing losses.

It seems the market has shared my concern, with the share price down 86% over the past five years.

Yet NIO — sometimes dubbed the ‘Tesla of China’ — just posted its first ever profitable quarter, potentially removing a key bearish obstacle for me. So, with the stock down 26% since October, should I add NIO to my ISA at $5?

A potential turning point

As mentioned, NIO just reported its first ever quarterly net profit in Q4 of 2025. Adjusted operating profit was $178.9m, a far cry from the $860m lost from operations the year before. And there was a surprise net profit of $40.4m for the quarter.

Also impressive was that revenue jumped 79.5% to $4.95bn, beating expectations, as it delivered 124,807 vehicles (up 71.7%). This was fuelled by the company’s multiple brands — NIO, ONVO, and Firefly — that target different market segments.

For example, NIO’s Firefly EV is a premium small vehicle, which is launching across Europe and the UK this year. Meanwhile, the ONVO L90 SUV and massive NIO ES8 remain best-sellers in their respective categories.

For the full year, revenue increased 33.1% to $12.5bn, while the vehicle margin improved to 14.6%, up from 12.3% in 2024. Encouragingly, the vehicle margin hit 18.1% in Q4, as NIO benefitted from the high-margin premium ES8. R&D expenses also fell significantly.

Management is guiding for 80,000 to 83,000 vehicle deliveries this quarter, representing an increase of about 90.1% to 97.2%. As volumes increase, NIO could finally reach the economies of scale needed to turn consistently profitable.

Cramer turns bullish

Therefore, it’s easy to see why some investors are changing their tune on the EV maker. One is CNBC‘s Jim Cramer, the host of Mad Money. This week, he turned bullish on the stock for the first time in years.

Agreeing with a caller on the show, Cramer said: “I think you’re absolutely right. They did have a good quarter. I’m going to go with you. Five bucks. Let’s do it. It’s a spec. That’s okay. You’re allowed one spec.”

Now, ‘spec’ (speculative) here means that he still sees NIO as a high-risk, high-reward stock. And I would agree with this, because one swallow does not make a summer, as it were. NIO still posted a net loss of $2.1bn last year.

If inflation from the escalating Iran conflict hits the global economy hard, NIO’s progress could be derailed. For example, lithium and chip costs could rise higher, putting pressure on margins.

Then again, these are (hopefully) near-term issues. The global EV market is only going to get larger, creating strong growth opportunities over the long run for innovative carmakers like NIO.

My move

Given the incredible competition in the EV market today, when even Tesla is struggling to drive sales growth, I’m impressed with NIO’s ongoing progress.

However, I’m going to keep the stock on my watchlist for now to see whether the profitable quarter was merely a one-off.

The post Jim Cramer is bullish on NIO stock at $5! Should I buy it for my ISA? appeared first on The Motley Fool UK.

Yes, the company is smaller than Tesla and loss-making. But a decade ago, Tesla was loss-making too — and much smaller than it is now.

Maybe NIO could end up achieving something similar?

A distinctive niche

As a business, I see a lot to like about NIO.

It has been growing sales and is now a sizeable business. Last year’s vehicle deliveries of 326k represented year-on-year volume growth of 47%.

By contrast, Tesla delivered 1.6m vehicles last year. That actually represented a 9% fall compared to the prior year.

This means that, last year, NIO’s sales volumes were about 20% of Tesla’s (and closing the gap fast), but NIO’s $11bn market capitalisation is less than 1% of Tesla’s $1.4trn market cap.

Sure, NIO does not have the power generation and storage business Tesla does, though its own expertise in battery swapping could help it go down that path if it chose to.

It also has been less vocal about its plans for self-driving taxis and robotics than Tesla, though over time I reckon both companies could pursue that business.

I think NIO has done a better job than Tesla in some markets of developing a moneyed clientele looking for fairly pricey cars.

Given downward pressure on electric vehicle profit margins in recent years, that could give it some cushion compared to rivals.

Does the valuation make sense?

But comparing NIO to Tesla may not be helpful, as personally I think Tesla’s valuation is too high to justify.

One big difference is, as mentioned, NIO remains loss-making and continues to burn through cash.

That is not some small difference, I think it affects the fundamental investment case for the stock.

If I bought now, I would be banking on the car maker turning a profit at some point. But there is no guarantee that will happen.

Strongly rising sales volumes have not yet fed through to the sort of economies of scale and resultant narrowing of losses that I would hope to see as a potential investor.

I reckon NIO continues to have massive potential and that might not be fully reflected in the current stock price. Buying it today could potentially end up being like buying into Tesla a decade ago.

For now, though, I am biding my time. NIO has not yet proved it has a profitable business model. That may come over time – and the stock could soar on the back of it.

But I prefer to see hard evidence of profitability before considering putting a penny into the stock.

The post Could buying NIO stock be like investing in Tesla a decade ago? appeared first on The Motley Fool UK.

Over five years, the share price has plummeted by 89%!

But the Chinese EV maker’s sales have been accelerating in recent quarters, with three separate brands under its belt and narrowing losses. So, is now a good time for me to add NIO shares to my portfolio?

A strong quarter

Despite operating in a tough Chinese market with cut-throat competition, NIO has been growing nicely. In Q3, it delivered 87,071 cars, a 40.8% increase year on year.

Its NIO, ONVO, and Firefly brands continue “to resonate with users across their respective market segments“. The ONVO L90 has remained the top-selling large electric SUV for three consecutive months in China, according to the firm. The L90 is a massive three-row SUV kitted out with loads of advanced technology.

Q3 revenue jumped 16.7% to RMB21.8bn ($3.1bn), while the vehicle gross margin improved from 13.1% to 14.7%, helping the company achieve its highest overall gross margin in three years (13.9%).

However, NIO posted an adjusted net loss of $384m for the quarter. While this was a 38% improvement from the year before, it’s nevertheless substantial. After more than a decade of existence, NIO still isn’t making cars profitably.

Management reckons profitability is just around the corner. But having followed the company for many years now, this is something I’ve heard before. This perennial issue continues to act like a handbrake on the share price, holding it back and dragging it down.

More concerns

As well as this lack of profitability, I have three other concerns. The first relates to European Union (EU) vehicle tariffs, which are complicating NIO’s expansion across Europe.

With BYD and others currently enjoying strong EV sales in the EU, this is disappointing for shareholders.

Then again, the firm’s affordable compact Firefly brand is now available in the Netherlands, Norway, and Belgium. And it’s set to enter the UK in 2026. Therefore, Europe could still prove to be a very large growth market for the company. But high tariffs do make the vehicles less competitive on price than they otherwise would be.

Another potential headache is that China is phasing out tax breaks on EVs, starting in 2026. So this has the potential to dampen sales in the company’s main market.

Finally, the global EV market is incredibly competitive these days. As well as Tesla and BYD, there’s XPeng and Li Auto, as well as the dozens of legacy carmakers that are all electrifying their line-ups.

My decision

If NIO can finally start eking out a profit, then I think the stock would prove to be a very savvy buy today at $5. The price-to-sales ratio is just 1.1, which in theory is very low for a company posting 30%+ revenue growth.

However, given the ongoing losses and fierce competition, I’m still not keen to invest. In my eyes, there are safer growth stocks for me to buy for my portfolio right now.

The post Down 35% in 2 months! Should I buy NIO stock at $5? appeared first on The Motley Fool UK.

Since then, though, the share price movement has been more disappointing, falling 35%.

Still, that leaves NIO stock 18% up so far this year. Not only has the share price improved overall this year – so have sales.

Could now be the time for me to tuck some NIO stock into my portfolio, hoping for long-term gain?

A changing market

The sales figures have been impressive in several ways.

In the most recent quarter, NIO’s sales volumes grew 41% year on year. I regard that as an impressive number in itself.

But what is also impressive to me is that the quarterly sales number was over 87,000 vehicles. Sure, that falls well short of what rivals like Tesla and BYD achieve. But it is still a sizeable number.

This indicates that NIO is not just some dinky start-up with ambitious plans. It is a large company operating at scale and already selling thousands of cars each week.

The electric vehicle market has been evolving, with competition getting more pronounced. Tesla’s performance this year has been mixed. By contrast, NIO is moving forward at speed, albeit from a lower base.

What’s holding me back from investing

There have been other pieces of promising news this year as well.

For example, that jump in NIO stock over the summer followed news that it planned to broaden its product range, opening up new market segments. That could be good for sales volumes and revenues.

But it is not revenues that have been holding me back from buying some NIO stock for my portfolio. After all, they are already substantial and rising handily.

What has been keeping me from investing so far is profits – or, rather, the lack of them. NIO has been consistently loss-making so far.

The company’s net loss in its most recent quarter was markedly smaller than in the same quarter last year – but it still came in at around £365m.

Keeping a close eye on things

Could that change?

Certainly. After all, making cars is capital-intensive but can also be lucrative.

Setting up operations can mean spending lots of cash. But hopefully once volumes get big enough, economies of scale can help turn a loss into a profit.

That is what happened with Tesla, for example.

It could yet happen with NIO too. I think the company has a lot going for it, as its growing sales volumes demonstrate. The brand is gaining traction with some car buyers, it has pricing power thanks to its premium positioning and higher volumes could help wring out manufacturing efficiencies.

However, the ongoing losses concern me as a potential investor. NIO has not yet proven its business model can be profitable.

So, although I will keep a close eye on it, I will not be buying any NIO stock just yet.

The post NIO stock’s down 35% since October. Time to buy? appeared first on The Motley Fool UK.

That’s a healthy 59% gain. Therefore, someone who invested £5,000 at the start of the year would now have roughly £7,950. Nice. 

However, longer-term performance has been very disappointing. In fact, five grand invested in NIO at the start of 2022 would now be worth just £1,200 (excluding currency moves).

NIO is heavily loss-making, so has never paid shareholders a dividend.  

Red ink

The reason for the stock’s decline essentially boils down to this lack of profitability. Unlike global EV leaders Tesla and BYD, the company has incinerated cash for years. 

In 2024, it reported a net loss of about $3.07bn. Losses are expected to narrow both this year and next, but this issue is a concerning one. 

So, why has the stock jumped recently? Well, the stock market is quite frothy right now, with lots of speculation being seen. NIO has probably benefitted somewhat from this environment. 

However, it would be unfair not to mention the company’s accelerating revenue, driven by new vehicle releases. This includes its Onvo L90 (a massive three-row SUV), which is expected to drive sales growth. So this is undoubtedly a positive for shareholders.

Meanwhile, the stock’s price-to-sales (P/S) ratio is 1.7. This is a lot lower than Tesla (16.5). And with analysts seeing revenue growth of 36%-40% for both this year and next, NIO’s P/S multiple does look cheap.

A trio of negatives

However, three things put me off investing. As mentioned, there’s the ongoing losses. NIO’s management team has long been promising that various partnerships and cost-cutting measures would change the picture, yet the red ink just keeps spilling year after year. 

Second, the firm has gone all-in on battery-swap technology. Its ‘Battery-as-a-Service’ offering lets customers buy the car without the battery, lowering the upfront cost. Not only does this help boost sales, it also adds recurring subscription revenue, which I find attractive from an investing perspective. 

On the other hand, I also see these battery-swap stations as a burden. They cost a lot to build and maintain (not great for margins). Moreover, as battery technology improves (both in range and charging time), these stations might become obsolete. 

It’s worth mentioning that Tesla originally experimented with a battery-swap station, but eventually abandoned the idea to focus on its Supercharger network.

Third, the global EV market is incredibly competitive nowadays. Dozens of new models are being released every year, with the Chinese market increasingly cut-throat. Again, I fail to see how this is good for building and maintaining profit margins.

My move 

Summing up, NIO has a good brand in its domestic Chinese market, with growing sales and a nice range of vehicles. It’s founder-led and not afraid to try innovative things to differentiate itself in a crowded market.

However, it’s still uncertain whether it will ever grow into a global EV powerhouse like Tesla and BYD. With ongoing losses and a potentially burdensome battery-swap model, which it can’t just abandon at the drop of the hat, I’m not bullish long term. 

In my opinion, there are better and less risky growth stocks to consider right now. 

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So, given the recent strong positive momentum combined with the low price compared to 2021, could it make sense for me to buy some NIO stock now for my portfolio?

Thinking about shares in the right way!

While the shares currently costs less than a tenth of the price in 2021, that is no indication of where the price may go from here. Just because a share used to sell for a particular price does not mean it will ever hit that price again.

Instead, when looking at possible shares to buy for my portfolio, the question I ask is whether the current price is attractive, given the company’s long-term commercial prospects.

NIO’s in growth mode

I certainly see a lot to like about NIO.

The electric vehicle market has been growing and I expect that to continue in years and indeed decades to come.

While, it may not be one of the top names, NIO is no minnow. Last month it sold over 1,000 vehicles a day on average. That was an all-time record and, at 64% higher than the prior September’s sales, shows that NIO is firmly in growth mode.

But this is not just a story about sales volumes.

NIO’s premium branding helps set it apart, while its launch of several new models over the summer could also extend its appeal. Indeed, that is part of the reason NIO stock has surged in recent months.

I also liked NIO’s battery-swapping technology and continue to think it is attractive. But as battery range grows over time, that may turn out to be less of a competitive advantage than once hoped.

Still, with strong sales growth, substantial and improving economies of scale, and a well-defined market positioning to appeal to customers, I think NIO could have a strong future.

Sales are in the fast lane, but not profits!

However, while NIO’s sales volumes make me sit up and pay attention, the profit picture appeals to me less.

So far, the company has been consistently loss-making. In its most recently reported quarter, the business reported a net loss of over half a billion pounds.

Is that a problem?

Perhaps not. NIO has used its rising stock price this year to raise more funds by selling shares, helping its liquidity. Longer term, car companies including Tesla have proven that years of heavy losses can give way to profits once economies of scale are sizeable enough and the business model is refined.

Keeping a close eye

Even if it does not break into profit soon, I think NIO stock could rise if sales keep growing at a fast clip.

If it can prove it is on the path to breaking even, or actually breaks even, I reckon the share may soar over time.

But that can be a difficult journey. For now, NIO continues to lose money hand over fist. That concerns me as a potential investor, as I like to see evidence a company is able to make profits.

So, for now, I am not investing – but watching closely!

The post Up 61% this year, could NIO stock keep going? appeared first on The Motley Fool UK.

Today, Tesla is still proving the naysayers wrong, with its share price nearing an all-time high.

NIO (NYSE:NIO), on the other hand, has been an altogether different story. Since listing in 2018, the stock has spent more time falling than rising. And currently at $7, it’s around 89% off a high of $62 reached back in 2021.

Yet so far this year, NIO (+59%) is outperforming Tesla (+13%). Were it to ever match the current market size of its American EV peer, it would make investors buying today at $7 a hell of a lot of money.

Let’s take a look at the bull and the bear case for NIO stock. Then I’ll don my judge’s wig to deliver my verdict.

Bull

The investment case here rests upon a few key ingredients. One is the huge Chinese EV market in which NIO operates. Unlike in the US, where there’s EV pushback from some politicians and consumers, the transition to EVs in China has government backing and is in full swing.

The company continues to increases its sales, albeit from a much lower base than Tesla. In Q2, vehicle deliveries were up 25.6% year on year to 72,056, with revenue rising 9% to RMB19bn ($2.66bn).

In August, NIO shipped 31,305 vehicles, a company record. Growth is being driven by the launch of two new brands (Onvo and Firefly), which target the family-oriented and small high-end segments, respectively. These significantly expand the firm’s total addressable market.

One thing I think separates NIO from Tesla is the much faster pace at which it launches new models. Onvo’s spaceship-like SUV, the L90, was launched in July, followed by the new NIO ES8 in August.

In Q3, it expects to deliver between 87,000 and 91,000 vehicles, which would represent an impressive 40.7% to 47.1% increase from Q3 2024.

All in all, the growth story here is still very much intact. The company seems to be differentiating itself in a very crowded Chinese EV market. So I can see why some investors might be bullish.

Bear

Turning to the bear case, this fundamentally revolves around the lack of profitability. NIO has never turned a profit, unlike Tesla. In Q2, the net loss was just under $700m.

I always get a feeling of déjà vu writing about NIO because its quarterly losses are both large and consistent! It was also around $700m in last year’s Q2.

Consequently, the company has to keep raising money to keep the factory lights on. Its latest equity offering raised $1.16bn, which will last a couple of quarters at the current rate of cash burn.

The good news is that this will add to the $3.8bn that was on the balance sheet in June. So the firm is ok for cash for now, but the risk of dilution is never far away for shareholders here.

Finally, China’s relentless EV price war worries me. It appears to be a price-cutting race to the bottom.

Verdict

As is probably already clear, my view is that the stock isn’t the next Tesla. It’s too risky for my liking, even after falling 89% since 2021. I won’t be buying.

The post Could buying NIO stock at $7 be like investing in Tesla in 2015? appeared first on The Motley Fool UK.

From hitting a stock price of over $60 in 2021, NIO has fallen as low as close to $3 over the past year. Overall though, 2025 has so far seen the price revving up.

NIO now trades for 61% higher than at the beginning of the year. But it is still a long, long way below its 2021 price. So could it just be getting started?

Fast-growing business with wind in its sails

It is not only NIO’s stock price that now looks very different to 2021. The business – and its marketplace – have also evolved a lot.

The marketplace for electric vehicles (EVs) has changed because demand has grown but heightened competition has put pressure on profit margins.

A growing market size presents an opportunity for all car makers, including NIO.

Lower profit margins however, are a risk. NIO’s long-term focus on building a premium brand can give it some insulation here. So too can its launch of innovative vehicles, including several large models it announced over the summer.

In the last quarter, NIO delivered over 72,000 vehicles. That represents volume growth of 329% compared to the equivalent quarter in 2021. With a growing installed user base, wider model range and increased demand, I see NIO as having the wind in its sails.

Lots still to prove when it comes to profitability

NIO has recently taken advantage of that – and its booming stock price – to boost liquidity by selling more shares. That helps it buy time, as it continues to burn cash.

While a lot has changed for the company since 2021, one thing that has not is its consistent inability to turn a profit.

In fact, its net loss in the most recent quarter was dramatically higher than the equivalent figure for 2021.

Watching without investing… yet

That concerns me as a potential investor. The startup costs of ramping up production can make car manufacturing an unattractive proposition. But the ideal is that, as sales volumes grow, losses reduce due to economies of scale – and eventually a company can turn a profit. That is what happened at Tesla, for example.

So far, profits have been elusive at NIO. In the short-term, I think a strong newsflow and any more positive sales updates could potentially push NIO stock even higher.

What about the long term? I think NIO could soar even from here – or fall a long way. What happens, in my view, will likely ultimately depend on whether NIO can turn the corner when it comes to profitability.

Investors remain patient. If NIO can become consistently profitable, I think its share price could potentially end up far above today’s level.

For now though, I see the ongoing lack of profitability as a risk. So I will not be buying NIO stock without evidence that the company’s business model can be profitable on a sustained basis.

The post Up 61% so far this year, is NIO stock just getting started? appeared first on The Motley Fool UK.

Still, that sort of price volatility is not unusual when it comes to EV makers. NIO’s rival Tesla (NASDAQ: TSLA) has had its fair share of dramatic price swings over the years too. Over the past five years though, it has soared 186%.

Over the past decade, Tesla has gone up a stunning 2,462%.

But while Tesla now has a market capitalisation of $1.3trn, NIO’s is a much more modest $17bn.

Tesla sales volumes fell in the first half of this year, while NIO’s sales are growing. Could buying NIO stock for my portfolio today be similar to buying into Tesla stock a decade ago?

NIO looks a lot like Tesla used to

NIO’s sales growth reflects a number of things. One of them is the fact that its sales are currently well below Tesla’s, making it easier to report strong growth. A decade ago, Tesla was in the same position. Today though, its much larger sales base along with some self-inflicted brand image problems mean its sales volumes have been falling.

One of the reasons I do not own NIO stock is that the carmaker has not yet proven that its business model can be profitable, despite strong sales growth. That was true of Tesla a decade ago too.

Incredible stock performance

In fact, one of the drivers for Tesla stock’s outstanding performance over the past decade was that it proved it could grow sales volumes and convert those sales revenues into profit. If NIO can do the same, I think that could help NIO stock soar.

NIO’s premium positioning also reminds me of how Tesla was initially perceived, although over the years it has cut its prices and introduced models to try and appeal to different parts of the market.

A key reason for NIO stock soaring over the past month has been the unveiling of a couple of new large models. It is also aiming to appeal to different market segments, although maintaining a premium positioning.

With competitive pressures leading to lower selling prices and profit margins for many carmakers, it remains to be seen whether that strategy is sustainable as it scales up.

There are some differences

Still, NIO is not Tesla. The latter’s early strength in the EV market gave it some advantages that later entrants do not have. Then again, they benefit from a larger, more developed market.

NIO has focused its efforts to date on vehicles. Tesla today aims to expand into areas such as robotics.

A decade ago though, it was more focused on cars. It had only made early steps in the power generation market and in April 2015 set up its energy division. So a decade ago, Tesla was a car company with energy ambitions.

NIO is a car company now, but its battery swapping technology could yet let it move into energy storage. Other technologies may yet let it move into adjacent areas like artificial intelligence (AI).

NIO does remind me a lot of Tesla a decade ago. But until it has proven its business model can make money, I will not be buying NIO stock for my portfolio.

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