Tesla vs. NIO: Which Stock is a Better Buy?

Tesla, Inc. (TSLA) and NIO Ltd. (NIO) are two of the leading electric car manufacturers in the world. While TSLA is more mature with a stable customer base across the world, NIO, based in China, is one of the fastest-growing companies in this industry…

Both stocks have generated significant returns year-to-date, despite the coronavirus pandemic. NIO is the clear winner with 426.9% returns year-to-date versus TSLA’s 396.1%. But which of these stocks is a better pick now? Let’s find out.

Latest Movements

Tesla, Inc. (TSLA) split its stock in five earlier this year, reducing its sky-high share price to an affordable amount. It is currently planning to expand to Indonesia to ensure a steady supply of nickel, a key component in manufacturing car batteries.

TSLA is also planning to launch three new electric vehicles shortly, including Tesla cybertruck and 2 electric cars. It is reportedly planning to launch its product in India in 2021. With a huge population and thereby potential market, this expansion is expected to ramp up profits for the company.

NIO Ltd. (NIO) recently raised $1.30 billion through American depository share offering, which is expected to contribute to the research and development of electric car ecosystems and automated technologies as well as developing its global market presence. It also plans to buy back some of its shares from Hefei investor group, which previously bailed out the company with a $1.40 billion cash infusion.

NIO is the first company to launch a “battery as a service” (BaaS) subscription model, allowing customers to purchase electric vehicles and battery packs separately. It is planning to launch its EVs in the European market by 2021.

Recent Financial Results

TSLA’s EV deliveries increased 7% year-over-year in the third quarter. In the second quarter, TSLA reported net revenue of $6.04 billion, indicating a year-over-year decline. However, net revenues grew 1% on a sequential basis. Net income of $104 million and EPS of $0.50 for the quarter indicates a significant improvement from the year-ago negative values.  Cash and cash equivalents improved 74% year-over-year to $8.62 billion.

NIO’s vehicle sales and total revenues both increased 146.5% year-over-year to…

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