The global electric vehicle (EV) market is in an odd place.
Around the world, EV sales surged 21% in 2025, led by a 33% sales increase in the European market. China remains the dominant EV market globally and it saw EV sales grow 19% in 2025.
However, in the American market, EV sales dipped 1% in 2025 largely due to the end of the EV tax credit late last year. Also of note was Tesla losing its crown as the world's largest EV producer to China's BYD and Tesla also has another Chinese EV company, Geely, nipping at its heels.
So, if you're wondering whether you should add American EV producer Rivian (RIVN 8.11%) or China's Nio (NIO +1.00%) to your portfolio, the answer is obviously Nio, right?
Not quite.
Image source: Getty Images.
A tale of two markets
Nio's problem has nothing to do with its cars. I actually really like how they look and they're pretty quick with long ranges to boot. The eT5 wagon might be my favorite of the lot. Nio's also got a battery swap network that allows the owners of its cars to swap a spent battery for a fresh one, alleviating range anxiety concerns common with EVs.
Nio's problem is that the Chinese EV market is maturing and entering its consolidation phase. EVs now make up the majority of new car sales in China.
And if you take a look at the top EV producers by market share in China, Nio isn't even in the top 10. BYD leads the pack at 26%, followed by Geely at 8.8%. Tesla even outsells Nio in its own market, with 4.4% market share securing it the No. 4 spot.
The market is closing rapidly. I predict it will begin to consolidate with larger automakers buying their smaller competitors in much the same way General Motors, Ford, and Chrysler did in the U.S. through the 1950s and 1960s.
From where it sits right now, Nio is looking much more like an AMC than a Ford. The Javelin was a cool car but it couldn't save AMC from being absorbed by Chrysler in 1987.
It will be even rougher for smaller Chinese EV producers like Nio with the government rolling back its subsidies for the EV market in its newest five-year plan.
Couple the end of those subsidies with the fact that Nio is not profitable and is likely a long way from achieving profitability. In its latest quarter (Q3 2025), vehicle sales were up 15% year over year but net losses remained high at $488.9 million.
Now, in fairness to Nio, it is reducing its net losses by about 30% quarter over quarter but it's not closing in on profitability fast enough. Meanwhile, most of its rivals have long-since achieved profitability.
So, even though it operates in the world's largest EV market, that market is becoming more hostile to smaller players like Nio. Why is Rivian any different?
NYSE: NIO
Key Data Points
A wide-open frontier
The main difference for Rivian is that the American EV market is much more wide open than China's. There is really only one large-scale EV manufacturer operating here and that's Tesla. In 2025, it sold six times as many cars as General Motors' main EV brand Chevrolet.
And while Nio is not on the list of China's biggest EV sellers, Rivian is on the list of America's. It's in the No. 6 spot, actually selling more EVs in America than Honda, Volkswagen, and GM's GMC brand. So, while it's swimming in a big pond like Nio, Rivian has far fewer big fish to share that pond with.
Like Nio, Rivian has not achieved net profitability but it's approaching profitability at a much faster pace than Nio. Q4 2025 saw a dip in sales, likely due to the EV tax credit expiring, but for the whole of 2025, Rivian saw its revenue grow 8% year over year.
Rivian did achieve gross profitability for 2025, hitting $144 million compared to a $1.2 billion gross loss in 2024 -- a $1.3 billion improvement in just one year. However, net profitability was a loss of $3.6 billion. Still, that's considerably lower than the $4.7 billion net loss it had in 2024.
In some ways Rivian may be better off because EV manufacturers in the U.S. never got as much support as their Chinese counterparts. Even without the EV tax credit, Rivian still sold 9,745 cars in Q4 2025, a decline from Q4 2024, sure, but it didn't derail a good year for the company.
NASDAQ: RIVN
Key Data Points
And I expect this year will be even better because Rivian is slated to release the R2 SUV in March. The R2 is a low-cost model starting at $45,000, below the average new car cost in America of $49,000.
Rivian is still a risky prospect but it has a much greater opportunity than Nio and if you're looking for a speculative EV play, Rivian is looking a lot stronger than Nio.
