The electric vehicle (EV) market is abuzz with the talks of new car launches and their features. One popular topic amongst EV stocks is NIO (NYSE:NIO) versus Tesla (NASDAQ:TSLA). What are the differences? And which EV stock should I buy?
Company Information
NIO is a China-based company that was founded in 2014. This business became the talk of the town when its stock price surged over 1500% since its debut in 2018. Tesla, on the other hand, is a popular name amongst car manufacturers. This electric car manufacturer produced more than one-third of the electric vehicles sold in the US. Its CEO Elon Musk is known for making headlines over controversial statements.
NIO vs Tesla: The EV Stock Price Battle
Source: Seeking Alpha
The chart depicts an interesting stock price battle of NIO and TSLA. The competition between the two most talked about EV Stocks of the US is pretty intense.
Investor’s Insights
NIO | TSLA | |
Market Capitalization | $60.1 Billion | $639.2 Billion |
Share Price | $37.29 | $674.25 |
52-Week Change | 927% | 332% |
Tesla has a huge market capitalisation compared to NIO. But I’m not surprised. After all, NIO is a fairly new entrant in the automobile industry and is still expanding. But its performance has been outstanding with more than a 900% increase in share price over the last 12 months.
What makes these automakers unique?
The concept of Battery as a service (BaaS), introduced by NIO, has pushed the sales of its electric vehicles. This has actually made its cars more affordable as the upfront price is reduced. What’s more, NIO has begun increasing its production capacity. It expects to start producing 150,000 vehicles per year within the first quarter of 2022.
On the other hand, Tesla is expected to benefit from Biden’s green policy with its acquisition of Solar City in 2016. Moreover, the firm is also known for innovation. With Elon Musk always attracting investors’ attention, Tesla has a free marketing resource in the shape of its CEO. That’s quite an advantage to have, I feel.
2021 EV Stock Volatility
After a tremendous year, NIO’s stock kicked off 2021 with an ever-increasing stock price hitting its highest point in mid-January at $66.99. Since then, it has tumbled and is trading at around $37, recording a 43% decline in stock price.
Tesla also had an excellent start to the year. This rise in stock price continued for the whole month of January and hit the highest point at $900. The stock pulled back slightly and is now trading at around $670, recording a 25.5% decline in stock price.
Concluding Remarks
The Electric Vehicle market is set to boom. It is expected to grow to $802.8 billion by 2027. With more competitors like Porche entering the market with their models of electric vehicles, the future is uncertain. But currently, both Tesla and NIO appear to be leading the EV stocks.
However, personally, I like the look of NIO more so than Tesla for my own portfolio. I believe its BaaS can give it a good edge over competitors and, therefore, potentially allow it to capture a much more significant portion of market share in the future. But, only time will tell if I’m right.
There is another growth stock that may be even more promising though…
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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.
