Currently, there is a massive battle in the electronic vehicle industry. You guessed it - NIO vs. Tesla round two. In one of our previous rideshare blog posts, we’ve discussed now NIO managed to overcome its struggles and reach the top once again. However, it is still heavily compared to Tesla, and for a good reason.
Now, Nio’s and Tesla’s stock prices have been in the limelight in the past week. These two electric vehicle manufacturers are the most desirable stocks on the planet at the moment.
Combined, these two companies trade over 200 million shares daily, making them very sought-after. So, let’s see what the market says.
Going Public
One of the key differences between these two parties is that Tesla has been operating more than a decade longer than NIO. Tesla (TSLA, -1.03%) went public at $17 per share in its earlier stages. Its Wall Street escapade has had its ups and downs ever since.
On the other hand, NIO (NIO, +6.15%) emerged in US markets around two years ago. This Chinese electric vehicle manufacturer isn’t as famous as Tesla - at least not in the US. However, its popularity has been increasing, so we’re excited to see what comes next.
Both of these companies can be great for long-term investments because they are dominating the electric vehicle market. However, some experts claim that NIO might be a better investment. Here’s why.
NIO’s Secondary December Offering
NIO has recently organized a secondary offering and managed to sell 68 million American depositary receipts for $39 per share. Many investors painted this move as a blatant money grab because the CEOs wanted to exploit its rapidly rising share price.
However, not many of them remember that Tesla pulled the same move less than a year ago. They initially raised around $2 billion on shares, at the price of $767 per share. And that was not the first, nor the last time Tesla did that. Musk raised $5 million this month alone and made a bold statement that he plans to sell Tesla shares occasionally.
We don’t judge either of these companies for their bold moves - that’s why public markets exist in the first place.
NIO has offered a fair price, which was even lower than the average market value by 7%. At that time, they couldn’t have made a better move. If they didn’t do that, their company might not have existed now.
NIO vs. Tesla - The Endgame
While Tesla has become a synonym for electric vehicles, that doesn’t mean that its share price will increase steadily as time passes. More companies are adopting the electric vehicle trend, so the competition is going to increase significantly.
In our last post on our rideshare website, we’ve discussed exciting vehicle releases for 2021. Did you notice how many of those are electric vehicles?
This trend is not going anywhere, and we’re yet to see how everything pans out. While NIO and Tesla are currently the two top contenders, the market’s shift can happen when the industry becomes more saturated.
Tesla’s China Debut
Tesla has released the Model 3 vehicles that were made in China. This move was supposed to be its highly-anticipated China debut. However, the numbers weren’t as impressive. Tesla managed to sell only 21,600 cars last month. While that was just enough to place it higher in the market share, it was nowhere near its initial forecasts.
However, total electric vehicle sales in China paint a different story. One thing’s for sure - electric cars are becoming much more popular there. In November, over 169,000 electric cars were sold in China. We can safely conclude that, even though Tesla is dominating the US market, the Chinese market is a bit more challenging to conquer.
NIO’s Growth So Far
Compared to Tesla, NIO’s production numbers are silly. The company has delivered around 37,600 vehicles in 2020. While the number may seem low, that’s more than double compared to cars delivered the year before.
However, NIO is working hard on raising funds to speed up the production, and it has massive support from the Chinese government. Its strategy to align with state-owned companies is proving to be effective.
One thing we have to praise about NIO is their patience. They are working through all the challenges patiently and efficiently, enabling steady market growth.
Moreover, NIO has signed a contract with State Grid Electric Vehicle Service Co, which belongs to China. Together, these two companies plan to build circa 100 charging stations in 2021. While this number may seem low, it further proves our conclusion that the company is taking a more straightforward, step-by-step approach to conquering the market.
Unfortunately, the one thing that NIO isn’t going to have an easy time with is Tesla’s global popularity. That’s one of Tesla’s primary weapons, which has proven to be lethal for other electric vehicle companies. So, who will prevail in the end? Only time will tell.
What’s to Come?
NIO and Tesla have become bitter rivals in the electric vehicle industry. While these two names are fighting a massive battle in the media and the stock market, other EV companies are silently emerging.
There are more than 20 electric vehicle manufacturers that are expected to join the competition in 2021. The electric vehicle economy has been skyrocketing in recent years, and this trend is undoubtedly going to continue. While NIO and Tesla might dominate the market now, we can’t say for sure if this trend will continue in the next two years.
Make sure to follow up on our rideshare blog to find out the latest news. We share the most exciting vehicle-related stories and releases regularly.
