Electric vehicles will account for about 35% of all global new car sales by 2030, according to projections by Goldman Sachs. Tesla Inc. (ticker: TSLA) is the clear EV market leader, but it has operated with little competition until recently, and EV startups and legacy automakers are bringing new EV models to the market that will challenge Tesla’s dominance. In June 2023, Bank of America estimated Tesla’s U.S. EV market share will drop to just 18% by 2026, and it has already shown signs of weakening: It fell from 65% in 2022 to 55% in 2023.
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As EV sales have slowed in recent months, some carmakers have cut production or pivoted back to hybrid vehicles. Still, a record 1.2 million EVs were sold in the U.S. in 2023 with fresh records expected for 2024, and long-term transition plans are still in place. Here are seven of the best EV stocks to buy other than Tesla, according to Bank of America:
| Stock | Implied upside over Feb. 9 close |
| Li Auto Inc. (LI) | 101.9% |
| Rivian Automotive Inc. (RIVN) | 139.8% |
| XPeng Inc. (XPEV) | 112% |
| General Motors Co. (GM) | 94.5% |
| Toyota Motor Corp. (TM) | 3.9% |
| Ford Motor Co. (F) | 65.6% |
| Ferrari NV (RACE) | 16.2% |
Li Auto Inc. (LI)
Li Auto is a leading Chinese EV maker. The company’s first model, the Li One, is a large SUV. Li reported 31,165 vehicle deliveries in January, up 105% from the previous year. Li also reported its cumulative delivery count is up to 664,529 as of the end of January. Analyst Ming Hsun Lee says booming luxury EV demand in China coupled with Li’s attractive pipeline of new vehicle models make it a compelling investment opportunity. Bank of America has a “buy” rating and $62 price target for LI stock, which closed at $30.71 on Feb. 9.
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 reported 2023 production of 57,232 vehicles, more than double its 2022 production. The company’s fourth-quarter production of 17,541 vehicles was up 7.5% on a quarterly basis. Analyst John Murphy says Rivian has attractive products, competitive technology and is among the most viable EV startups. He says Rivian is a serious competitive threat to legacy automakers. Bank of America has a “buy” rating and $40 price target for RIVN, which closed at $16.68 on Feb. 9.
XPeng Inc. (XPEV)
XPeng is another Chinese EV startup targeting the mid-level and high-end segments of the market. XPeng launched its G3 SUV in 2018 and its P7 sports sedan in 2020. XPeng reported 8,250 vehicle deliveries in January, up 58% year over year. January deliveries included 2,478 units of the brand new X9 seven-seat EV. Lee says XPeng can expand margins as its product mix improves and the company cuts costs. In addition, new model launches and sales network expansion create significant growth opportunities. Bank of America has a “buy” rating and $18 price target for XPEV stock, which closed at $8.49 on Feb. 9.
[READ: 7 Best EV Stocks to Buy in 2024]
General Motors Co. (GM)
General Motors has announced $35 billion in planned EV investments through 2025 and plans to exclusively offer consumer EVs by 2035. The company’s Chevy Bolt was the third best-selling EV model in the U.S. in 2023 behind the Tesla Model Y and Model 3. Murphy says GM is leading the legacy auto industry’s transition to the future, and its highly profitable legacy business is helping fund its investments in EV and autonomous vehicle technology while also supporting the company’s dividend payments and share buybacks. Bank of America has a “buy” rating and $75 price target for GM stock, which closed at $38.56 on Feb. 9.
Toyota Motor Corp. (TM)
Toyota is one of the world’s largest automakers. The company plans to sell 3.5 million EVs per year by 2030 and plans to more than triple its EV production from 190,000 units in 2024 to more than 600,000 units in 2025. Analyst Kei Nihonyanagi says growing hybrid EV sales will help improve Toyota’s earnings per vehicle in coming years. In addition to EV production, Nihonyanagi says Toyota is one of the few legacy automakers that can contribute meaningfully to decarbonization efforts via technological innovation. Bank of America has a “buy” rating and $233.14 price target for TM stock, which closed at $224.46 on Feb. 9.
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 2023, Ford sold 72,608 EVs in the U.S., second only to Tesla, for an 18% increase year over year. The Ford F-150 Lightning was the best-selling EV pickup, with 24,165 units sold. Murphy says Ford is taking a measured approach to EV investing and is expanding its hybrid offerings. He projects 6.1% revenue growth in 2024. Bank of America has a “buy” rating and $21 price target for F stock, which closed at $12.68 on Feb. 9.
Ferrari NV (RACE)
Ferrari is a high-performance luxury car maker with a long history in the Formula One racing world. Ferrari also has a world-class research and development team. The company said it will invest $4.6 billion in developing full EV models, which will make up 5% of sales by 2026 and 40% in 2030. Ferrari plans to roll out its first EV model by the end of 2025. Murphy says Ferrari has a sizable order book that extends through 2025, and the company’s initial 2024 financial guidance exceeded expectations. Bank of America has a “buy” rating and $456 price target for RACE stock, which closed at $392.56 on Feb. 9.
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Tesla Competitors: 7 Rival EV Stocks to Buy originally appeared on usnews.com
Update 02/12/24: This story was previously published at an earlier date and has been updated with new information.
