NIO, LI, or TSLA: Which EV Stock Does Wall Street Like the Most?
Electric vehicle (EV) makers are navigating through macro challenges and fierce competition. In this article, we analyze three EV manufacturers—Nio, Li Auto, and Tesla—and evaluate which stock Wall Street is most optimistic about amid these pressures.
Market Overview
Global sales of electric and plug-in hybrid vehicles increased by 18% year-over-year to 1.3 million in January 2025.
- Despite the rise, sales dropped 35% compared to December 2024 due to the Chinese New Year holidays and weakened demand.
- Many EV makers continue to show resilience, defying macroeconomic challenges, price wars, and high tariffs.
Using Stock Comparison Tool, we compare Nio (NIO), Li Auto (LI), and Tesla (TSLA) to determine the most promising EV stock according to Wall Street analysts.
Nio (NYSE: NIO)
Nio stock has gained about 9% in the past month, but it is still down 82% from its three-year high.
- Macro pressures in China, price wars, and profitability concerns have weighed on investor sentiment.
- Nio is working on operational efficiencies and expanding into lower-priced, mass-market brands like Onvo and Firefly to fuel future growth.
Growth and Targets
- Nio plans to break even by 2026, with a goal to double deliveries in 2025.
- In January 2025, Nio posted a 38% year-over-year growth in deliveries, reaching 13,863 vehicles despite a 55% drop from December.
Analyst Rating
- JPMorgan analyst Nick Lai downgraded Nio to Hold, with a target price of $4.70.
- Wall Street consensus is Hold, with three Buys, seven Holds, and two Sells. The average target price of $5.22 indicates 18% upside potential.
Li Auto (NASDAQ: LI)
Li Auto’s stock has risen 16% over the past month but remains down 14% over the past year.
- The company is dominant in China’s new energy vehicle (NEV) market, delivering 500,508 vehicles in 2024, representing 33% growth.
- However, January’s deliveries fell 4% year-over-year and 48.9% sequentially due to seasonal impacts from the Chinese New Year.
Growth and Innovation
- Li Auto’s Li L6 model reached a milestone of 200,000 cumulative deliveries in January 2025, and it continues to be the best-selling EREV in China.
- The company also began mass production of in-house developed SiC modules, setting the stage for the launch of new battery electric vehicles (BEVs).
Analyst Rating
- Macquarie analyst Eugene Hsiao upgraded Li Auto to Buy, lowering the price target to $29.
- With four Buys and one Hold recommendation, Li Auto holds a Strong Buy consensus rating, with an average target price of $29.72, suggesting 15% upside.
Tesla (NASDAQ: TSLA)
Tesla stock surged to a record high after Donald Trump’s win in the 2024 U.S. elections, driven by optimism about Elon Musk’s ties with Trump.
- Over the past year, the stock rose 89%, but recently, it has fallen by 10% due to a shift in investor sentiment, particularly concerns about Musk’s political exposure.
Challenges and Innovation
- Tesla reported Q4 2024 underwhelming results, with operating income down by 23% and automotive revenue falling by 8% due to the price wars.
- Despite these challenges, analysts remain optimistic about Tesla’s robotaxi prospects, autonomy initiatives, and the Optimus robot.
Analyst Rating
- Stifel analyst Stephen Gengaro reiterated a Buy rating but lowered the price target to $474 from $492 due to pricing pressures and competition.
- Wall Street consensus for Tesla is Hold, with 13 Buys, 12 Holds, and 10 Sells, and the average target price of $340.50 indicates downside risk of 4.3%.
EV Stock Showdown: Wall Street’s Preference for Li Auto Over Nio and Tesla
Based on Wall Street sentiment, both Nio and Li Auto show potential, with Li Auto emerging as the most favored stock.
- Li Auto is considered a Strong Buy, driven by its strong execution, profitability, and new innovations.
- While Nio and Tesla show comparable upside, Tesla’s stock carries downside risk due to current market conditions, while Nio faces challenges in meeting growth expectations.
For investors looking at the EV sector, Li Auto stands out as the most optimistic choice from Wall Street.
