According to regulatory filings published on Tuesday, the largest outside investor in Tesla - Baillie Gifford & Co - has taken an 11.44% stake in newly listed NIO Inc., a company that aspires to be a direct rival to Tesla in China.

Baillie Gifford disclosed that it owns 85.3 million shares of the Shanghai-based company. As of the end of day on Tuesday, that stake was worth about $500 million. NIO recently raised about $1 billion during its IPO last month and has its United States headquarters in San Jose, California just about 17 miles from Tesla's Fremont factory.

Baille Gifford owns 7.7% of Tesla, the second largest stake only to CEO Elon Musk's stake. At the close of the market on Tuesday, this stake was worth about $3.5 billion.

News of the new position sent NIO shares soaring by 39%, including its after-hours gain.

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Right now, NIO is working on ramping up production of its first commercial product: the ES8 sport utility vehicle.

As a reminder, James Anderson, a Gifford fund manager, had sent a letter to Elon Musk back in July letting him know that he was not happy about Musk's his Tweets about cave diver Vern Unsworth, who Musk labeled as a "pedo".

Then, in September of this year, it was reported that Gifford had been questioned by the SEC about Musk's "funding secured" tweet fiasco. 

"[Musk] needs help, and I mean that psychologically as much as practically", Anderson told the Globe and Mail last month. 

Perhaps Gifford has grown tired of all of the extra work that comes with being a Tesla shareholder although, so far, there is no indication that it has sold any of their Tesla stake. 

"We are very supportive, but we would like peace and execution at this stage. It would be good to just concentrate on the core task", Anderson told Bloomberg back in July, about 2 months before Elon Musk was sued by the SEC for securities fraud. 

While the move could be simply for diversification purposes, it certainly is a stark reminder that there are other options for those who want to sink money into (money losing) electric vehicles. And should Elon’s behavior become even more erratic, these "other options" will only start to look more and more attractive.