The stock market gave up ground on Monday morning, as investors couldn't continue to ride positive momentum from earlier in the holiday period into the final two days of 2019. Investors are trying to stay confident about their views for the market and the U.S. economy in 2020, but many still point to the strong market performance in the past year as a reason to expect at least a pause in the upward trends of major stock indexes. As of 11 a.m. EST, the Dow Jones Industrial Average (^DJI -0.25%) was down 178 points to 28,468. The S&P 500 (^GSPC -0.12%) lost 18 points to 3,222, while the Nasdaq Composite (^IXIC -0.41%) fell 70 points to 8,937.

Even though holiday trading was relatively quiet, there was considerable attention on the electric vehicle market. Tesla (TSLA -7.16%) saw its stock give up some ground, but Chinese counterpart NIO (NIO -7.79%) enjoyed solid gains on good news for the industry.

Will Tesla underdeliver?

Shares of Tesla were down more than 3% Monday morning as investors reacted to mixed news. Although the electric vehicle pioneer celebrated a key milestone, some of those following the stock aren't as comfortable about its near-term prospects.

Tesla Model 3 in dark blue on a road in front of a picturesque landscape.

Image source: Tesla.

On the positive side, Tesla delivered its first Model 3 cars from its Chinese Gigafactory facility in Shanghai. The plant produced 15 electric cars for Tesla employees, celebrating the end of a year-long process of getting the China production site up and running. Tesla has high hopes for the facility, especially because it will allow the company to serve the growing Chinese consumer auto market without facing the same trade-related tensions that come with bringing vehicles across the Pacific from U.S. production plants.

However, Tesla got a dose of pessimism from stock analysts at Cowen. The analysts believe that Tesla's full-year delivery numbers are likely to fall short of the 360,000 to 400,000 vehicles that the company has projected. The shortfall could come in large part because the automaker's higher-end Model S and Model X vehicles haven't seen as much demand as initially expected, and Cowen thinks that the stock could get cut in half from current levels if demand from mature auto markets doesn't accelerate soon.

Tesla's stock has been extremely volatile, and opinions about the carmaker are strong on both sides. In the end, investors will have to wait to see how Tesla actually performs in the long run, especially in key markets like China.

NIO gets a charge

Shares of NIO soared more than 40% as the Chinese electric vehicle maker announced its latest financial results. Although NIO has suffered through a painful few months, today's news has apparently restored some confidence in the stock.

NIO's numbers indicated continued growth. The company delivered almost 4,800 vehicles in the third quarter of 2019, up from about 3,550 vehicles in the second quarter. About 4,200 of those deliveries were of the ES6 SUV model, while NIO delivered just over 600 of its higher-end ES8 SUVs. Overall revenue was up 22% compared to three months earlier, and losses narrowed from previous levels.

What has some investors especially excited is the fact that NIO has announced a new model. The EC6 will be what the company calls a "smart premium electric coupe SUV," and CEO William Bin Li believes that the automaker's "pursuit of both high performance and stylish design in our products" should help it overcome pressures from reductions in government subsidies for electric vehicles.

NIO and Tesla will continue to fight hard for supremacy in the Chinese electric car market, but there's likely more than enough room for both to prosper. With so much potential, China could become the most important market for electric vehicles on the planet -- and investors will have to place their bets on whether Tesla or NIO will end up on top.