Shares of NIO (NYSE:NIO) popped on Tuesday after the company reported solid third-quarter numbers before settling down to pre-earnings levels.  NIO earnings underscored that the Chinese electric-vehicle maker is ramping production, delivery, revenue and margins at a promising pace. But NIO stock investors shouldn’t read too much into this report.

NIO stock was down big heading into the print. At the beginning of September, this was a $14 stock. Heading into the earnings report, NIO stock was trading hands around $6.50. From this perspective, the big post-earnings rally looks more like a dead-cat bounce that a continuation of a secular uptrend.

Moreover, it is still too early to tell whether or not NIO really is going to be the Tesla (NASDAQ:TSLA) of China. The company delivered just over 3,000 vehicles in the third quarter. Tesla, meanwhile, delivered over 80,000 vehicles in the same quarter.

Thus, while NIO appears to be on the Tesla growth trajectory and NIO stock could be a long-term multi-bagger, there is still a significant lack of clarity in that bull thesis. Investors would be wise to wait for more clarity before buying into NIO stock with both hands.

The Tesla Comparison Is Compelling

The majority of the bull thesis for NIO stock is that this company is following in Tesla’s footsteps and disrupting the multi-billion dollar global automotive industry by pioneering an electric vehicle revolution.

Through one lens, this bull thesis is quite compelling. NIO is a premium electric vehicle manufacturer that is based in China. For all intents and purposes, NIO is trying to emulate Tesla, since NIO is focused on building high-end electric vehicles. Sticking with this comparison, NIO is where Tesla was roughly six years ago, when TSLA was just starting to deliver Model S vehicles to customers. NIO’s first volume production car, the ES8, was delivered to its customers for the first time in June.

The numbers imply that NIO is doing better today ramping operations than Tesla did six years ago. In the first six months of its deliveries in 2012, Tesla delivered 2,600 Model S vehicles. NIO has already surpassed that number and expects to deliver 10,000 ES8 vehicles by the end of the year.

Moreover, and perhaps more importantly, Tesla had 12,200 Model S reservations shortly after it began delivering the vehicles. NIO now has 15,800 ES8 reservations.

Broadly speaking, NIO’s early production and delivery numbers are largely bigger and better than Tesla’s early production and delivery numbers. That gives merit to the bull thesis. Back in 2012, Tesla was a $30 stock. Today it is a $300 stock. That is a ten-fold increase in six years. If the same thing happens to NIO stock, you are looking at a $70 stock in six years, versus $7 today.

Too Early To Tell

Investors shouldn’t fall in love with NIO stock because it has Tesla growth written all over it. To be sure, if you contextualize early stage production and delivery numbers for Tesla and NIO, the comparison becomes much less bullish.

Back in 2012, the EV market was taking its first steps. The total volume of new EV sales in 2012 summed to less than 120,000 cars. Today, that number is in excess of 1 million vehicles. Moreover, Tesla’s 2,600 Model S deliveries in 2012 came against the backdrop of 53,000 EV sales in America, so it represented about 5% share. NIO’s 10,000 target deliveries in 2018 comes against the backdrop of presumably more than 600,000 EV sales in China, implying less than 2% share.

In other words, NIO today is ramping faster than Tesla back in 2012. But, in the context of an EV market that has grown dramatically over the past six years, Tesla’s ramp back in 2012 was far more impressive.

From this perspective, there is no guarantee that NIO continues to ramp and becomes the next Tesla. There are simply too many differences, and too many questions. Tesla didn’t really have competition when it went from zero to hero over the past several years. Now, the entire automotive industry has shifted its focus to EVs, so NIO has a ton of competition. How will they deal with that?

Moreover, before the Model S, Tesla had the Roadster, which was generating revenue and positive gross profits. NIO has the EP9, a high-performance EV sports car, but it’s selling very few EP9 cars. Will NIO’s brand new ES8 cars ramp with consistent pace considering the lack of an EV track record for the company?

Meanwhile, NIO stock has a market cap of $7 billion. When deliveries of the Model S began to ramp, Tesla stock had a market cap of $3.5 billion. All things considered, does early-stage NIO really deserve a valuation twice as big as early stage Tesla?

Bottom Line on NIO Stock

The long-term bull thesis on NIO stock is compelling, and recent quarterly numbers give that bull thesis more firepower. But, investors shouldn’t get too excited. This company is still a long ways from becoming the Tesla of China, and getting there is anything but a sure thing. As such, risk-adverse investors would be wise to wait on buying NIO stock until more clarity arises.

As of this writing, Luke Lango was long TSLA.