Forecasts for the rise and surge of electric vehicle (EV) adoption vary widely, depending on the source and if hybrids are included. Overall, however, global EV growth remains strong despite the U.S. market gaining traction more slowly than anticipated.
The world's roads seem destined to be filled with EVs, and to investors, that represents a massive opportunity, especially for full-electric vehicle makers like Lucid (LCID +0.92%) and Chinese EV maker, Nio (NIO +5.04%).
The case for Lucid
Lucid certainly has momentum behind it after exiting 2025 with a couple of new records. Lucid's deliveries hit 15,841 vehicles for 2025, a strong 55% gain over the prior year. More than one-third of Lucid's deliveries for the year came during the fourth quarter, which also topped the prior year figure handing the automaker its eighth straight quarter of new delivery records.
Image source: Lucid.
Just as important as deliveries were Lucid's production figures, which had a slow start to 2025 before solving bottlenecks. Lucid's fourth-quarter production roared 116% higher sequentially from the third quarter, and an even more impressive 148% higher than the prior year. As Lucid continues to ramp production of its recently launched Gravity SUV, investors can expect more quarterly delivery records.
Despite momentum, Lucid has drawbacks and uncertainty for investors. To put it bluntly, Lucid is a money-losing automaker and has incurred operating losses and negative cash flow since its inception. Lucid burned through nearly half of its cash reserves last year and had an accumulated deficit of $14.8 billion at the end of the third quarter 2025.
Lucid has production, delivery, and top-line momentum, but with such low sales volume and scale, the road to profitability looks incredibly bumpy, at best.
NASDAQ: LCID
Key Data Points
The case for Nio
Similar to Lucid as far as momentum goes, Nio deliveries have been soaring thanks to two new sub-brands, Onvo and Firefly. In fact, Nio delivered a new monthly high for deliveries in December with a near-55% surge higher to 48,135 vehicles, compared to the prior year. Momentum was even stronger during the fourth quarter, with a near 72% gain over the prior year to over 326,000 vehicles.
For savvy investors following Nio, the best part about its surge in deliveries is that its gross profit margins have been improving in recent years despite launching of new sub-brands and a brutal price war in China's domestic EV market.
NIO Gross Profit Margin data by YCharts
Better yet, management just announced that based on a preliminary assessment Nio is expected to achieve an adjusted profit from operations between $100 million and $172 million for the fourth quarter of 2025. It's a major step for the company to prove to investors it can eventually create the needed scale to deliver net profits down the road. Nio is aiming to achieve breakeven on an adjusted basis for the full year 2026.
NYSE: NIO
Key Data Points
Are they buys?
Despite strong delivery momentum from both Lucid and Nio, and the top-line revenue growth it supports, both have serious drawbacks. Lucid faces heavy cash burn, lower scale and sales volume, a major roughly 60% stake held by Saudi Arabia's Public Investment Fund (PIF), and growing competition. Nio also has its drawbacks, despite being a step ahead of Lucid in both scale and gross profits. It could be burdened by its strategy battery-swap network if the technology doesn't gain traction in the years ahead.
Both stocks have upside as the world transitions to EVs, but both also have too much uncertainty for most investors currently.
