Tesla, it’s truthful to say, has had a tough 2025 to this point. The inventory price is up 443% over the previous 5 years, however has tumbled 36% because the begin of 2025. Against this, electrical car rival NIO (NYSE: NIO) is up 1% to this point this yr. 1% is hardly the stuff of investor goals – however it’s a lot higher than business large Tesla has managed. So, may now be the time so as to add NIO inventory to my portfolio?

A difficult market

For now, I believe the reply is not any.

Tesla’s challenges, because the model reels from its chief govt’s excessive political profile, are partly self-inflicted. However solely partly.

The fact is that the electrical car market has moved on considerably from the place it was even only a few years in the past.

Demand is larger. However there are additionally a number of credible electrical car corporations promoting automobiles. That has had an influence on costs as these makers attempt to compete. In flip, revenue margins have taken successful throughout the business.

So from NIO’s perspective, there may be each good and dangerous information.

The excellent news is that the electrical car market is in progress mode. The dangerous information is that that has come on the price of decrease revenue margins, one thing which on the whole tends to profit massive companies which have better economies of scale.

As I see it, although, NIO has one other particular problem: advances in battery know-how.

Dramatically quicker claimed battery charging occasions might be a boon for rivals like BYD (and its long-term investor Warren Buffett) and Tesla. However they threaten to make NIO’s battery swapping know-how largely out of date. Up to now, that had been a key aggressive benefit.

Nonetheless some causes for hope

Nonetheless, NIO inventory has carried out markedly higher than Tesla inventory to this point this yr. So may my issues be overdone?

Whereas Tesla inventory has crashed in 2025, BYD is up a storming 54%. Positive, NIO inventory will not be performing as poorly as its US rival – however its 2025 share price progress has lagged far behind that of its native Chinese language competitor.

In the meantime, within the first quarter, BYD’s income grew 36% yr on yr to round £17.6bn. Examine that to NIO. It has not but launched first-quarter numbers, however within the fourth quarter, revenues had been round £2.0bn, a 15% year-on-year progress.

Winners pulling forward

That’s not an apples-to-apples comparability, as the primary quarter of this yr noticed important geopolitical danger escalation.

However clearly, NIO is way behind each BYD and Tesla by way of absolute gross sales revenues. Nonetheless, these revenues are substantial – and progress charges could lag BYD badly, however are far forward of Tesla at present.

Nevertheless, a key aggressive benefit NIO has invested closely in is now below risk. In the meantime, it lacks the huge scale of BYD and Tesla because the market consolidates.

By itself, that doesn’t essentially put me off shopping for NIO inventory, although I believe the funding case has weakened given what I discussed above.

What does put me off, nevertheless, is that whereas BYD and even Tesla stay firmly worthwhile, NIO stays firmly loss-making.

A weaker Tesla share price doesn’t essentially assist NIO. NIO must be judged by itself deserves. Till it has confirmed it might probably earn a living, I can’t be investing.