Tesla’s been a really enriching share over the previous 15 years. Since 2010, it’s up about 20,500%, even after accounting for the current 40% drop. For NIO (NYSE: NIO) nonetheless, the inventory market story has been very completely different. It has misplaced over half its worth since itemizing in 2018.

Up to now this yr, NIO inventory’s fallen 14% and now trades for simply $3.75. For context, it reached $61 again within the pandemic tech bubble of 2021, which means the peak-to-trough loss here’s a staggering 93%!

Nevertheless, the Chinese language electrical automobile (EV) maker remains to be rising its gross sales strongly and plans international enlargement. So might shopping for the inventory at $3 be like me getting in on a younger Tesla again within the day?

Issues I like

NIO’s bread and butter is making good, premium EVs. Nevertheless, it’s additionally launched two sub-brands: Onvo, which targets the mainstream household market; and Firefly, a high-end model centered on smaller vehicles. It has large plans to develop its manufacturers internationally over the following few years, presumably emulating bigger rival BYD‘s success.

The $7.8bn-capitalised firm has pioneered battery-swapping expertise, permitting prospects to swap out a depleted battery for a brand new one in a couple of minutes. It now has 3,245 swap stations, and administration says this provides it a “competitive edge” within the battery EV market.

It’s additionally constructed plenty of NIO Homes, that are a mix of showroom and group hub for NIO customers and the broader group. Many have libraries, cafés and convention rooms. I like distinctive firms like this, particularly modern ones run by founders (NIO’s William Li has been known as the ‘Elon Musk of China’).

In 2024, income jumped 18.2% yr on yr to $9bn, with 221,970 autos offered (a 38.7% improve). In the meantime, the automobile margin improved to 12.3% from 9.5% for the earlier yr. And it’s focusing on a doubling of NIO automotive gross sales in 2025.

And what I don’t like

On the opposite facet of the ledger although, NIO reported a $3bn web loss final yr. That was 8% larger than the yr earlier than, which means the EV maker stays deeply unprofitable.

Furthermore, it’s arduous sufficient establishing one new automotive model, by no means thoughts efficiently advertising and scaling three of them. Then there are these NIO Homes, its personal smartphone, a life-style model known as NIO Life, and extra. My concern is that the agency’s attempting to do far an excessive amount of.

One other large worry I’ve is BYD’s new ultra-fast charging tech, which it says can ship 250 miles of vary in simply 5 minutes. In that case, that would someday make NIO’s battery-swap stations out of date. This raises doubts in my thoughts concerning the technique of continuous to roll out these pricey stations worldwide. 

Falling knife

Sadly, I might say the negatives outweigh the positives right here. Whereas NIO retains discovering methods to boost funds, it additionally continues to incinerate money at an alarming fee. That can’t proceed for too many extra years.

If NIO can swing to a revenue in some unspecified time in the future, the inventory might explode larger. However what degree will it’s exploding from by then? $2? $1? It’s anybody’s guess at this level.

The inventory nonetheless appears extra like a falling knife to me than an enormous Tesla-esque winner within the making. I’m not going to purchase.