Chinese Nio, Inc. (NYSE: NIO) and US headquartered Tesla, Inc. (NASDAQ:TSLA) are two popular names in the electric vehicle sector. Alongside other local Chinese makers, Nio has geared to give Tesla a run for its money as its EV deliveries continue to rise. In March, Nio said it delivered 9,985 in March, helping it post a quarterly record of 25,768 deliveries. The stock rose more than 6% after the deliveries report.
Tesla, which also has most of its production and deliveries in China, has been robust in the EV sector. The EV maker said that it produced 305,000 vehicles in the first quarter and delivered more than 310,000 vehicles. Clearly, Tesla is a leader in the EV sector. However, the growing deliveries of rivals such as Nio make it a worthy competitor. But which one should you invest in?
Comparing the stock returns of Nio and Tesla gives the latter an edge. In the last six months, Nio has returned -50%, compared to Tesla’s gain of 13%. In one year, Nio has returned -46%, compared to Tesla’s gain of 37%. Evidently, one looking at medium-term returns should pick Tesla. Nonetheless, global chip issues and Covid-19 lockdowns in China have hit all EV makers. This is evident in both stocks, which have been sliding in the last 5 days.
Nio and Tesla’s technical analysis
Source – TradingView
Technically, both Nio and Tesla are declining. However, Nio is on a general downtrend compared to Tesla, which is correcting after a bullish run. Both stocks face bearish pressure from the ongoing industry bottlenecks.
Concluding thoughts
Tesla stock wins ahead of Nio as it has demonstrated a persisted price rally and has higher returns than Nio. This analysis finds Nio as a momentum-led stock, with pronounced gains during major announcements. Investors looking to buy Tesla, should exercise patience and scoop it lower at around $895-$900 level. The stock could also be bought at the current price if the level continues to hold.
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