The electric vehicle market is a high-stakes race, and Tesla (TSLA), NIO (NIO), and Li Auto (LI) are vying for the lead with distinct strategies and bold ambitions. Tesla is set to announce its results after market close today, including dropping its keenly anticipated delivery numbers. With earnings talk swirling today, it will be interesting to see how its investment case evolves from here.
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In the meantime, NIO and Li Auto are looking to close the gap to their U.S. counterpart, both reporting strong growth in vehicle deliveries and tech innovations. All in all, now may be a good time to consider well-positioned EV manufacturers, given the confluence of factors supporting the sector as a whole.
Tesla (NASDAQ:TSLA)
Tesla’s the name that started it all, the rockstar of EVs, but this year has been a bumpy ride. America’s biggest EV maker reported 384,000 vehicle deliveries in Q1, down 14% YoY, a second straight drop that has got investors getting increasingly skeptical of its scaling prospects. Most recent figures show that production has reached ~410,000 vehicles, with the Model 3 and Model Y leading the pack.
However, the numbers reflect a company struggling with factory retooling for the refreshed Model Y and intense competition from cheaper Chinese rivals. Elon Musk’s political side gigs and tariff worries haven’t helped either, with protests and boycotts denting the brand’s shine in the U.S. and Europe.
Today’s earnings call is going to be a pivotal moment, and while we don’t have the full financials yet, the delivery slump suggests revenue and margins might take a hit. Tesla’s betting on autonomy, as evidenced by its recent robotaxi launch in Austin, while its energy storage business, which deployed 9.6 GWh in Q1, is a solid success.
Overall, I feel like Tesla has still got that first-mover edge and a cult-like following, but with a $1.1 trillion market cap and a stock down 18% YTD, the question is whether the hype can outrun the headwinds.
Is TSLA Stock a Buy, Hold, or Sell?
Currently, analyst sentiment is quite mixed on Tesla. The stock carries a Hold consensus rating, based on 14 Buy, 13 Hold, and 6 Sell ratings assigned over the past three months. However, TSLA’s average stock price target of $310.43 implies a ~6.5% downside over the next twelve months, meaning Wall Street believes TSLA stock remains notably overvalued.
Nio (NYSE:NIO)
NIO is the more sleek, premium EV player from China. With its battery-swapping technology and fancy showrooms, it has definitely started to gain increasing popularity. In Q2, they delivered 72,056 vehicles, a solid 25.6% jump from 57,373 last year, hitting their guidance of 72,000-75,000 units.
June alone saw 24,925 deliveries, up 17.5% YoY, with 14,593 from the NIO brand, 6,400 from family-oriented ONVO, and 3,932 from the new FIREFLY compact line. Their sub-brands are driving growth, although the leading NIO brand saw a 14.85% dip in H1 2025, prioritizing profitability over volume.
I believe that NIO’s ecosystem, which includes battery swaps, subscriptions, and affordable models such as the ONVO L60, will retain high customer interest. Still, China’s economic slowdown and European tariffs pose risks. Investors are excited about NIO’s push into markets like Azerbaijan.
However, note that the company’s margins remain very thin, so NIO may struggle to scale as quickly without widening its losses. If you’re in, you’re betting on NIO’s premium niche and tech edge, but it’s a long game. NIO is set to report its Q2 earnings on September 4, according to the earnings calendar.
Is NIO Stock a Good Buy?
On Wall Street, NIO stock carries a Hold consensus rating based on two Buy, six Hold, and one Sell rating. NIO’s average stock price target of $4.50 implies roughly 8.5% downside potential over the next 12 months, with analysts also viewing the premium Chinese EV manufacturer as overvalued.
Li Auto (NASDAQ:LI)
Li Auto is carving out a unique space with extended-range EVs, blending hybrid practicality with electric flair. In Q2, they delivered 111,074 vehicles, a 25.2% increase from 88,595 in the same period last year. However, they reduced their guidance from 123,000 to 128,000 due to a sales system upgrade.
June deliveries hit 36,279, a 22% year-over-year rise, with cumulative deliveries at 1,337,810 by the end of the month. Unlike NIO, their focus on high-margin SUVs, such as the L9, and the strong-performing Li MEGA MPV keeps them profitable.
Li Auto’s earnings are expected in early September, with the company typically reporting 45-60 days after the end of the quarter.
Overall, I believe that their hybrid strategy resonates in China, where range anxiety persists, but their pure EV push, such as the upcoming Li i8 in July, faces stiff competition from Xiaomi’s YU7. Tariffs and price wars from BYD and Tesla are hurdles, yet Li’s cash flow and steady growth make it a safer bet in all honesty. If you’re eyeing Li Auto, you’re backing a pragmatic player with room to grow, but global expansion is the next test.
Is Li Auto a Good Stock to Buy?
Li Auto is currently covered by nine Wall Street analysts, most of whom hold a bullish outlook. The stock carries a Moderate Buy consensus rating with six analysts currently bullish and three neutral. LI’s average price target of $33.30 indicates ~9.5% upside potential over the next twelve months.
Tesla, NIO, and Li Auto Take Divergent Paths in Race to Scale
All things considered, the EV space is becoming increasingly competitive by the day, with each company developing a unique strategy to differentiate itself. Tesla still benefits from its first-mover advantage, though some vulnerabilities are beginning to surface.
NIO strikes me as a high-risk, high-reward play — it’s packed with innovation, but operating on razor-thin margins. Li Auto appears to be the most stable among the three at the moment. As earnings roll in, keep a close eye on who can truly scale both efficiently and profitably in this rapidly evolving landscape.