Electric vehicles could make up about 35% of all global new car sales by 2030, according to Goldman Sachs. Tesla Inc. (ticker: TSLA) is the clear EV market leader, but for years it operated mostly free of competition. EV startups and legacy automakers are now bringing new EV models to the market that will challenge Tesla’s dominance. According to Cox Automotive, Tesla’s share of U.S. EV sales dropped below 50% for the first time in the second quarter, down from a peak of 82.5% in early 2020.
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If you’re betting on other companies to continue stealing market share away from Tesla, here are the seven best stocks to buy, according to Bank of America:
| Stock | Implied upside over Aug. 20 close |
| Li Auto Inc. (LI) | 47.7% |
| Rivian Automotive Inc. (RIVN) | 51.5% |
| XPeng Inc. (XPEV) | 62.5% |
| Zeekr Intelligent Technology Holding Ltd. (ZK) | 97.1% |
| Toyota Motor Corp. (TM) | 40.7% |
| General Motors Co. (GM) | 84.9% |
| Ford Motor Co. (F) | 87.3% |
Li Auto Inc. (LI)
Li Auto is a leading Chinese EV maker and was the first to sell an extended-range EV, which uses a small internal combustion engine to charge its battery and differs from traditional hybrid technology. The company’s first model, the Li One, was a large SUV. Li reported 51,000 vehicle deliveries in July, up 49.4% from a year ago. Li also reported its cumulative delivery count is up to 873,345 as of the end of July. Analyst Ming Hsun Lee says Li is gaining market share in the premium and luxury segments, and the company’s new model pipeline is impressive. Bank of America has a “buy” rating and $30 price target for LI stock, which closed at $20.31 on Aug. 20.
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 reported 2023 production of 57,232 vehicles, more than double its 2022 production. The company produced 9,612 vehicles in the second quarter and has guided for full-year 2024 production of 57,000 vehicles. Analyst John Murphy says Rivian is among the most viable EV startups thanks to its long-term growth strategy, its attractive products and its sizable cash pile. Bank of America has a “buy” rating and $20 price target for RIVN stock, which closed at $13.20 on Aug. 20.
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 11,145 vehicle deliveries for July, up 1% from a year ago. July deliveries included 1,459 units of its new X9 large seven-seater EV, which launched in January. Lee says XPeng has an early mover advantage in advanced driver assistance system technology, which it could eventually convert into high-margin service revenue. Bank of America has a “buy” rating and $11 price target for XPEV stock, which closed at $6.77 on Aug. 20.
Zeekr Intelligent Technology Holding Ltd. (ZK)
Zeekr Intelligent Technology develops and sells premium smart EVs in China and went public in May. Zeekr is backed by Chinese automotive group Geely and has several luxury vehicle models, including its Zeekr 001 five-seat crossover, its Zeekr 009 luxury six-seater and its Zeekr X compact SUV. For July, Zeekr reported 15,655 vehicle deliveries, up 30% from a year ago. Lee projects Zeekr will become profitable by 2026 and will generate at least 25% annual revenue growth between now and then. Bank of America has a “buy” rating and $30 price target for ZK stock, which closed at $15.22 on Aug. 20.
Toyota Motor Corp. (TM)
Japan’s Toyota Motor is one of the world’s largest automakers. The company plans to sell about 3.5 million EVs in 2030 and triple its EV production from 190,000 units in 2024 to 600,000 units in 2025. Analyst Kentaro Hosoda says Toyota is one of the rare companies that can contribute to global decarbonization by relying on technological innovation rather than EV sales. Hosoda says Toyota faces competitive risks in Europe, but U.S. volume growth should help mitigate those risks. Bank of America has a “buy” rating and $255.21 price target for TM stock, which closed at $181.34 on Aug. 20.
General Motors Co. (GM)
Since 2020, legacy U.S. automaker General Motors has announced more than $12 billion in investments in North American EV manufacturing and supply chain development. 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. GM’s current EV lineup includes the Chevrolet Blazer EV, Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Hummer and Cadillac Lyriq SUV. Analyst John Murphy says GM’s extremely profitable core business is helping fund its EV investments. Bank of America has a “buy” rating and $85 price target for GM stock, which closed at $45.98 on Aug. 20.
Ford Motor Co. (F)
Legacy automaker Ford previously announced plans to spend $50 billion on EV models through 2026 and produce 2 million EVs annually by that time. However, in October 2023, Ford postponed $12 billion in EV investments due to softening demand. On Aug. 21, the company canceled plans for a new large EV SUV and pushed back its expected release of a new electric pickup, though it still plans to move forward with lower-cost EVs. Last year, Ford sold 72,608 EVs in the U.S., second only to Tesla, for an 18% increase. The Ford F-150 Lightning was the best-selling EV pickup, with 24,165 units sold. Murphy says Ford is making progress in reducing EV costs. Bank of America has a “buy” rating and $20 price target for F stock, which closed at $10.68 on Aug. 20.
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Tesla Competitors: 7 Rival EV Stocks to Buy originally appeared on usnews.com
Update 08/21/24: This story was previously published at an earlier date and has been updated with new information.
