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NIO (NYSE:NIO) stock jumped 10% Tuesday (26 August) after JPMorgan analyst Nick Lai set a new price target of $8 on the Chinese electric vehicle (EV) maker, up from $4.80. That $8 is 31% ahead of the previous day’s close, and still 19% higher even after the subsequent gain.
The new upgrade strengthens a Buy consensus among analysts.
Lai predicts a 50% increase in vehicle deliveries in the 2025 full year, with a further 47% to follow in 2026. Early pre-orders for the company’s new Onvo L90 and ES8 sport utility vehicles are strong. Both target competitive pricing, with NIO’s battery subscription deal lowering initial costs further.
The Executive Premium Edition of the ES8 is priced at the equivalent of around $58k bought outright. But subscribers to the battery plan only have to fork out about $43k upfront.
NIO is up 53% so far in 2025, as Tesla (NASDAQ: TSLA) has slid 13%. So is it time for Tesla investors to be scared? We need to remember NIO stock is still down 67% over the past five years. Tesla, meanwhile, is up 145% in the same timescale despite worries about weakening EV sales.
Market command
Tesla saw sales in Europe fall by around a third in the first half of this year. And although NIO doesn’t yet sell a lot in Europe, Chinese manufacturers in general are seeing sales climb. In April, BYD climbed ahead of Tesla in Europe for the first time.
Europe might not be a direct reflection of worldwide EV sales. But it looks like a key market where cars from the US and China can show their relative sales power outside of their home markets. As such, I see it as an important global indicator.
Whether to consider buying NIO over Tesla comes down to one key thing in my case. It’s all about valuation. And on that score, the two could hardly be further apart.
Profit and loss
One thing makes it hard to put a valuation on NIO — the company isn’t making a profit. And analysts still don’t see that happening by 2027, although losses should narrow.
Tesla, by contrast, has been profitable for a while. But its stock is currently valued at 260 times forecast 2025 earnings. Even if we could meangfully compare the two on a price-to-earnings (P/E) basis, it still wouldn’t be fair. Growth investors have been buying Tesla more based on expectations of what the company might achieve in the future — think robotaxi, think general robotics and AI, and all that.
So which am I considering buying? I’ve seriously thought about both a few times. But at the moment my answer has to be neither. I won’t buy NIO because I can’t evaluate its losses — even though I share the bullishness for the near future.
And I’m steering clear of Tesla, at least for now, because of the sky-high valuation. But if either should change…
