Just a few years ago, Nio (NIO 8.20%) was a solid bet to challenge Tesla for supremacy in the electric vehicle (EV) market. Both companies had some revolutionary ideas, with Tesla's Supercharger network and Nio's battery swapping technology and lifestyle-driven Nio Houses.

Today, Tesla is getting a huge black eye from CEO Elon Musk's political activities and the distractions that have come with them, and Nio is getting left in the dust by other Chinese EV makers.

I was an early investor in Nio, buying at less than $5 and selling when the stock was in the $40s. Now that Nio's back under that $5 mark, is there a window for investors to capitalize on another run-up, or does Nio have too much ground to make up in the EV race?

Let's take a closer look at the Chinese EV maker.

Image source: Getty Images.

A different take on EVs

Nio got its start in 2014, so it hasn't been around for long. The company is an EV maker with a twist. Instead of making vehicles with batteries that need to be charged, Nio instead created an innovative system where customers would drive to a battery swapping station and switch out their depleted batteries for fresh ones. The battery swap takes about five minutes, so the concept was seen as a unique alternative to other EV products. The company went public in 2018.

Nio makes passenger vehicles under the Nio and Onvo brands, as well as smart EV compact cars under the Firefly brand. The Shanghai-based company is also known for its Nio Houses, which are places for people to visit and use the company's libraries, meeting rooms, or cafes. Nio currently operates 187 Nio Houses around the world, including several in Europe, where it has ambitions to expand its automotive deliveries.

Nio delivered 24,925 vehicles in June, up 17.5% from a year ago. The company says its second-quarter deliveries of 72,056 vehicles represent an increase of 25.6% from Q2 2025.

Growing competition is a concern

While Nio has an innovative approach, the company hasn't had a lot of luck scaling its product. While it delivered 785,714 vehicles in the first half of 2025, that ranks far behind the EV leader in China, BYD, which delivered 1.47 million vehicles in the first half. BYD has 29.4% of the lucrative Chinese EV market, trailed by Geely (12.5%), Changan (6.7%), SAIC (5.8%), and Tesla (4.8%). Nio is among a group vying for the remaining 40% of the market, according to CleanTechnica.

Nio, which already has sales networks in Norway, Germany, the Netherlands, Sweden, and Denmark, recently announced plans to expand into Austria, Belgium, the Czech Republic, Hungary, Luxembourg, Poland, and Romania. However, that will also require Nio to invest heavily in expanding its network of battery swapping stations throughout Europe.

As of April 30, Nio reported having 3,354 battery swapping stations, including 980 in China. The company has a network of 78 "Power Journey" routes in China, which are routes designed to allow drivers to easily access Nio power swapping stations. But Nio only had two Power Journey routes in Europe.

That's not great when you consider that more than a dozen years after it was formed, Nio is still operating at a loss. Revenue in the first quarter was $1.68 billion, but that still resulted in a net loss of $943.3 million.

Is Nio a buy today?

I really want to like Nio stock. I think the battery swapping idea is interesting, and I think the Nio Houses are a good way for the company to build a community -- an ideal way to foster interest in Nio and demand for its electric vehicles.

However, that doesn't make Nio a great investment. People are more interested in hybrid plug-in vehicles than in a niche automobile that allows you to swap out the battery. I'm also concerned about the heavy infrastructure lift that will be required to duplicate the battery swapping network in Europe and, eventually, other markets.

While Nio had a great run in the first part of the decade, rising to $60 per share, I don't see it as a buy today.