Electric vehicles will account for about half of all global new car sales by 2035, according to Goldman Sachs. Tesla Inc. (ticker: TSLA) is the clear EV market leader, but it has been operating mostly free of competition until recently. EV startups and legacy automakers are now bringing new EV models to the market. Tesla’s U.S. EV market share has already fallen from 72% in January 2022 to around 54% today, and its global EV share is only around 21%.
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Here are seven of the best EV stocks to buy other than Tesla, according to Bank of America:
| Company | Implied upside from May 8 close |
| Nio Inc. (NIO) | 45.1% |
| Li Auto Inc. (LI) | 37.4% |
| Rivian Automotive Inc. (RIVN) | 188.4% |
| General Motors Co. (GM) | 108% |
| Toyota Motor Corp. (TM) | 23.7% |
| Ford Motor Co. (F) | 74.7% |
| Ferrari NV (RACE) | 1% |
Nio Inc. (NIO)
Shares of Chinese EV maker Nio have been under pressure in the past two years thanks to broad-based weakness in U.S.-listed Chinese stocks. Chinese regulators are cracking down on tech companies, while U.S. regulators are threatening to delist Chinese stocks that do not comply with rigorous new accounting standards. NIO recently reported 6,658 vehicle deliveries in April, up 31% year over year. Analyst Ming-Hsun Lee says NIO has a leading position in the premium smart EV market in China. Bank of America has a “buy” rating and $12 price target for NIO stock, which closed at $8.27 on May 8.
Li Auto Inc. (LI)
Li Auto is another leading Chinese EV maker and was the first to sell an extended-range EV. The company’s first model, the Li One, is a large SUV. Li reported 25,681 vehicle deliveries in April, up 516% from a year ago. Li said its cumulative delivery total is now up to 335,599 vehicles. Lee says Li has a strong pipeline of models, is targeting greater than 20% gross profit margin in 2023 and is generating stronger free cash flow than its Chinese EV peers. Bank of America has a “buy” rating and $34 price target for LI stock, which closed at $24.75 on May 8.
Rivian Automotive Inc. (RIVN)
Rivian Automotive is an EV pure-play startup that went public in November 2021 and began delivering its first R1T electric pickup trucks the following month. Rivian recently reiterated its previous 2023 production guidance of 50,000 vehicles, roughly double its 2022 production. The company built roughly 9,400 vehicles and delivered just short of 8,000 vehicles to customers in the first quarter. Analyst John Murphy says Rivian is one of the most viable EV automaker startups, and he’s bullish on the company’s Tesla-like direct-to-consumer sales model. Bank of America has a “buy” rating and $40 price target for RIVN stock, which closed at $13.87 on May 8.
General Motors Co. (GM)
General Motors has not been shy about its plan to overtake Tesla as the top U.S. EV seller by the mid-2020s. GM has announced $35 billion in planned EV investments through 2025. While most EV startups are unprofitable and trade at steep valuations, GM reported $2.4 billion in net income in the first quarter and trades at just 5.2 times forward earnings. Murphy says the company’s core business is firing on all cylinders while it invests in next-generation EV and autonomous vehicle technology. Bank of America has a “buy” rating and $70 price target for GM stock, which closed at $33.66 on May 8.
Toyota Motor Corp. (TM)
Toyota is one of the world’s largest automakers. The company plans to introduce 10 new EV models and sell 1.5 million EVs per year by 2026. Analyst Kei Nihonyanagi says Toyota investors will likely need to wait at least two more years before the company generates notable growth in battery EV sales, but the stock is still an attractive investment given its current valuation at just 8.6 times forward earnings. He also projects 18.1% revenue growth in fiscal 2023. Bank of America has a “buy” rating and $170.51 price target for TM stock, which closed at $137.81 on May 8.
Ford Motor Co. (F)
Legacy automaker Ford plans to spend $50 billion on EV models through 2026 and is hoping to produce 2 million EVs annually by that time. In 2022, Ford sold 61,575 EVs in the U.S., second only to Tesla. That was a 126% increase for the year. The Ford F-150 Lightning was the best-selling EV pickup, with 15,617 units sold. Murphy says Ford is leveraging its Ford Blue and Ford Pro legacy businesses to fund its high-growth Model E EV business. Bank of America has a “buy” rating and $21 price target for F stock, which closed at $12.02 on May 8.
Ferrari NV (RACE)
Ferrari is a high-performance luxury carmaker with a long history in the Formula One racing world. Ferrari also has a world-class research and development team. The company says it will invest $4.6 billion in developing full EV models, which will make up 5% of its sales by 2026. By 2030, Ferrari plans for 80% of its models to be either purely electric or hybrid models. In the near term, Murphy is bullish on the Daytona SP3, which began shipping in the fourth quarter of 2022, and the highly anticipated Purosangue SUV. Bank of America has a “buy” rating and $300 price target for RACE stock, which closed at $296.97 on May 8.
[See: 10 of the Best Stocks to Buy This Year.]
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Tesla Competitors: 7 Rival EV Stocks to Buy originally appeared on usnews.com
Update 05/09/23: This story was published at an earlier date and has been updated with new information.
