2 High-Flying Electric Vehicle Stocks Have Serious Momentum -- But Are They Buys?

Core Viewpoint - The electric vehicle (EV) industry faced challenges in 2025, but companies like Lucid Motors and Nio are showing strong momentum heading into 2026, with differing investment prospects for risk-tolerant investors [1][2]. Group 1: Nio's Performance - Nio set a new monthly record for deliveries in December, achieving a 54.6% increase to 48,135 vehicles compared to the previous year [3]. - The fourth quarter saw an impressive 71.7% year-over-year growth in deliveries, totaling 124,807 vehicles [3]. - Nio's newer brands, Onvo and Firefly, contributed to only one-third of December's deliveries, indicating potential for further growth as market reach expands [4]. - Vehicle margins and gross profits improved significantly in Q3, suggesting that Nio's growth is becoming more profitable [4]. - Nio aims for 2026 to be its first breakeven year, which would be a significant milestone for both the company and the EV industry [9]. Group 2: Lucid's Performance - Lucid produced 8,412 vehicles in Q4, marking a 116% increase year-over-year, and delivered 5,345 vehicles, a 31% increase from the prior year [5]. - Lucid has set delivery records for eight consecutive quarters, with production of the Gravity SUV accelerating after overcoming supplier bottlenecks [6]. - Despite delivery growth, Lucid continues to experience cash burn, with widening adjusted EBITDA losses, and faces challenges in its market entry into Saudi Arabia due to the Public Investment Fund's significant stake [8]. Group 3: Investment Considerations - While both Nio and Lucid show delivery momentum, Lucid's financial challenges suggest that investors should monitor its stock from the sidelines [9]. - Investments in Nio are recommended to be limited to small positions, given its improving financial metrics compared to Lucid [9].