We recently published a list of 12 Best EV Stocks To Buy in 2025. In this article, we are going to take a look at where NIO Inc. (NYSE:NIO) stands against other best EV stocks to buy in 2025.

Electric cars, often known as electric vehicles or EVs, are automobiles powered by electricity instead of gas. Electric car stocks are comprised of companies that primarily manufacture electric vehicles. Firms that make components for electric vehicles, such as batteries or autonomous driving systems, are also regarded as part of the electric vehicle industry.

President Trump’s 25% tariffs on imported automobiles have officially come into force, affecting roughly half of the US auto industry. According to S&P Global Mobility estimates, 46% of the 16 million automobiles sold in the United States in 2024 were not produced domestically. The policy also includes tariffs on specified vehicle parts, including engines and transmissions, which will go into effect on May 3.

Wall Street analysts and investors have been skeptical of the tariffs, which some say might reduce business earnings and plunge the automobile industry into a recession.

Bernstein analyst Daniel Roeska stated in a recent note to investors:

“A 25% on automotive imports lasting beyond four to six weeks would likely have a chilling effect on the entire sector as [automakers] need to grapple with significant impact to the bottom line.”

Wall Street analysts believe that automakers’ and suppliers’ equities will remain volatile in the near term. The most vulnerable businesses are those with high import ratios. Several companies saw more than 60% of their U.S. sales in 2024 come from vehicles manufactured outside of the United States. Meanwhile, companies with all-U.S. final assembly lines and minimal dependence on imports, especially in the EV industry, are projected to be more secure.

In the first quarter, U.S. auto sales exceeded industry forecasts by a wide margin as buyers rushed to purchase new cars before the tariffs went into effect, which many believe will raise car prices. According to S&P Global Mobility’s tariff analysis, the costs of importing vehicles, auto manufacturing in the US, and consumer vehicle costs will all rise.

Analysts warn that if tariffs are completely implemented, typical new car prices, which are currently around $48,000, might rise by up to $10,000. Lower-margin, entry-level vehicles are more vulnerable to price increases or discontinuation since they are often sourced from low-cost countries and are prone to margin compression under the new tariff regime.

Specifically, China’s car exports are under strain as US tariff hikes impact major overseas markets. Cui Dongshu, secretary general of the China Passenger Car Association (CPCA), stated:

“The abrupt hike in U.S. tariffs will have a disastrous impact on economies such as Southeast Asia, and thus our exports to these markets will be impacted more than expected.”

March exports dipped 8% year on year, following a rise of 11% in February. Joint ventures and luxury brands suffered a 45% decline, exporting only 47,000 units. Exports from Shanghai-based EV facilities fell 82.4% in March to 4,701 units, while first-quarter exports fell 56.9% to 38,147 vehicles. The China Passenger Car Association fears that Southeast Asia, which is significantly touched by new US tariffs, may witness a decline in demand. Export growth was originally projected to slow to 10% in 2025, down from 25% in 2024, but this could potentially fall. Domestic sales surged by 14.4% to 1.97 million units in March and 6.1% to 5.18 million in the first quarter.

Methodology

We sifted through EV ETFs and online rankings to form an initial list of the 20 Best EV stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

NIO Inc. (NYSE:NIO)

Number of Hedge Fund Holders: 20

NIO Inc. (NYSE:NIO) is ranked ninth on our list of the Best EV Stocks. It is a Chinese electric car producer, has been publicly listed since September 2018, but many initial public offerings by other Chinese electric car makers have sparked investor interest in it.

The firm is benefiting from high client demand in China. After reporting 221,970 vehicle deliveries in 2024, a 38.7% jump over 2023, NIO Inc. (NYSE:NIO) announced significant growth in the first quarter of 2025, with 42,094 vehicle deliveries, 40.1% higher than the same time in 2024. As projected, total vehicle revenue climbed. The company reported automotive revenue of around $7.98 billion in 2024, reflecting an 18.2% spike over the previous year. In addition, its gross profit margin rose from 5.5% in 2023 to 9.9% in 2024.

On its fourth quarter 2024 conference call, NIO Inc. (NYSE:NIO) described the ET9 as “a flagship smart executive sedan” and announced that sales will begin in March 2025.

In 2024, the company installed 3,245 power exchange stations worldwide and manufactured over 25,000 power chargers. During the New Year’s holiday, a record 137,000 battery changes were completed in one day.

Overall, NIO ranks 9th on our list of the 12 Best EV Stocks To Buy in 2025. While we acknowledge the potential of EV companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NIO but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.