What happened

The returns from early stage electric vehicle (EV) company stocks were all over the place in September as investors try to decide which will thrive and which might not survive.

While Nikola (NKLA 7.23%) shares soared higher by 33%, newcomer VinFast Auto (VFS -3.35%) plunged 64%, according to data provided by S&P Global Market Intelligence. Amidst those substantial moves was the 12% decline in Chinese EV maker Nio's (NIO 8.72%) American depositary shares. 

Nio was coming off two consecutive months of record deliveries, but investors have been getting nervous about macroeconomic conditions in China. Nio has since reported its September vehicle delivery data, and it seems investors were right not to be too optimistic.

So what

After averaging nearly 20,000 shipments in the prior two months, Nio only reported delivering 15,641 in September. The company didn't address why deliveries backtracked after its two strongest months. Investors will have to wait until Nio releases its full third-quarter report to hear more. Nio also recently raised fresh capital by selling $1 billion in convertible bonds.

That money was used to pay down some notes maturing in 2027 while the new issues aren't due until 2029 and 2030. That shores up Nio's balance sheet and gives it more time to reach profitability, but it will still mean dilution for existing shareholders if those bonds are converted to stock. 

Nikola also went that route to raise capital back in August. Its stock also took a hit at the time. But in September the company shifted the narrative to its operational progress and investors liked what they heard. 

Nikola stock had been under pressure when it announced a recall of its battery electric trucks in August. Investors still don't know the costs involved to fix potential coolant leaks in battery packs. But for now, investors are focused on the official commercial launch of its hydrogen fuel cell trucks. While it will continue to make battery electric trucks based on demand, it wants to focus its future business on the hydrogen fueled versions. 

Nikola has more than 220 (non-binding) orders for the hydrogen trucks. It has been working to build out needed infrastructure including hydrogen production, refueling stations, and mobile refuelers. With a range of 500 miles, those trucks could see higher demand than battery powered trucks that can only go about 330 miles on a full charge. The stock surged in September due to optimism on the potential for the hydrogen fueled trucks. 

Now what

All of these companies are highly speculative investments. Nikola may not find sustainable demand for its hydrogen fuel cell trucks. Building out the infrastructure to support them could also run into roadblocks. Nio has additional risks to its business with the Chinese economy and potentially the strong-armed Chinese government.

September's crash for VinFast's stock seemed inevitable ever since shares soared after its public debut in August. The founder retained about 99% of the company so only a small amount of shares were floated for trading. That led to some crazy moves. Considering the Vietnamese EV maker only sold about 24,000 cars last year, its $100 billion-plus valuation was unsustainable. The stock's volatility and a fledgling business still make it a stock many investors should want to avoid, even after last month's plunge.