Electric vehicle (EV) investments are still driving headlines. The auto industry’s next phase of growth is dependent upon bringing the price of EVs down to make them more affordable for everyday consumers.
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Tesla Inc. (ticker: TSLA) continues to dominate the EV market, with its market capitalization soaring in 2025 But, buoyed by government subsidies, Chinese automakers are making significant inroads. BYD and Xiaomi, in particular, are outpacing long-established European brands with aggressive growth strategies across Europe. The world is already feeling the impact.
China’s remarkable rise in the EV market is driven by three key moves:
— Raw minerals: With a stranglehold on lithium, cobalt and manganese, China now commands 90% of the EV battery supply chain. Chinese companies are now rapidly establishing battery plants throughout Europe, even as companies like BMW are assembling their EV models in China.
— Customer options: BYD and Xiaomi have introduced EVs priced at about 25% of the cost of a base Tesla Model 3, making them more accessible to a broader audience.
— Global charging station network: China is rapidly deploying charging stations to bridge gaps between major cities, addressing range anxiety — a significant barrier to EV adoption in many countries.
China’s expansion has sparked concerns in the United States about its potential to undermine domestic manufacturing strength. During the first Trump administration, tariffs on low-cost Chinese goods were introduced to protect U.S. industries, and Trump campaigned in 2020 on a promised to further raise them to 60%, despite stiff criticism over inflation and supply chain disruptions. Despite vocally objecting to Trump’s tariffs, the Biden administration ultimately retained them. In May 2024, President Biden actually quadrupled tariffs on Chinese EVs to 100% and imposed new levies on Chinese semiconductor chips. The Inflation Reduction Act of 2022 further complicated the landscape by limiting tax credits for EVs due to sourcing requirements for battery components.
After making deep investments, re-tooling production lines and investing significantly in electric battery research and development, global car manufacturers were suddenly faced with a steep drop in consumer enthusiasm for EVs. In July 2024, McKinsey published a study revealing that a staggering 46% of EV owners would not repeat their purchase due to range anxiety. Resale values diminished as dealers slashed new car prices to relieve bloated inventories. This volatility has forced manufacturers to heavily reevaluate their net-zero commitments.
The heightened competition from China has led to lower EV prices, creating an unexpected silver lining for the industry. A wider range of prices increases EV appeal to younger buyers hungering for models combining eco-friendly innovation, exceptional design and a budget-friendly sticker price. As automakers respond to evolving consumer preferences, the incoming Trump administration may usher in new policies poised to reshape the EV landscape both at home and abroad. With economic, political and consumer dynamics at play, the industry stands at a pivotal moment in its evolution.
Here are the 10 most valuable auto companies by market capitalization in 2025:
Car company | Market capitalization* | Position change* |
1. Tesla Inc. (TSLA) | $1.37 trillion | ?+0 |
2. Toyota Motor Corp. (TM) | $237 billion | ?+0 |
3. Xiaomi Corp. (OTC: XIACF) | $116 billion | ?+5 |
4. BYD Co. Ltd. (OTC: BYDDY) | $104 billion | ?-1 |
5. Ferrari NV (RACE) | $78 billion | ?-1 |
6. Porsche Automobil Holding SE (OTC: POAHY) | $57 billion | ?+0 |
7. General Motors Co. (GM) | $56 billion | ?+3 |
8. Mercedes-Benz Group AG (MBG.DE) | $55 billion | ?-3 |
9. Bayerische Motoren Werke AG (BMW.DE) | $49.2 billion | ?-2 |
10. Volkswagen AG (OTC: VWAGY) | $48.8 billion | ?-1 |
*As of 01/19/2025.*Since last article update on Aug. 22, 2024.
10. Volkswagen AG (OTC: VWAGY)
Founded in 1937 and headquartered in Wolfsburg, Germany, Volkswagen is renowned for the iconic Beetle. Another classic, the Microbus, was reimagined in 2022 as the electric “ID Buzz.” Volkswagen also owns several premium brands, including Audi, Lamborghini, Bentley and Porsche.
Volkswagen has dropped in ranking in the last year, slipping from No. 9 to No. 10. Since its March 2021 debut into EVs, the stock has declined largely due to an inability to garner significant market share in the highly competitive Asian markets, posting an 8.3% decline in sales in China, its largest market, in 2024. The much-anticipated Trinity EV, expected to redefine the company, has now been postponed until 2032. The ID.2, envisioned as a replacement for the popular Golf, remains on track for a 2025 unveiling as a 2026 model and will represent its most affordable EV priced under 25,000 euros. Volkswagen’s financial situation had become so dire that the company scrapped plans for a $2.2 billion factory and reportedly considered the unprecedented step of closing plants in Germany.
However, Volkswagen’s partnership with Rivian Automotive Inc. (RIVN) has proven mutually beneficial, with additional plans to deepen their collaboration recently disclosed. Rivian contributes cutting-edge technology, while Volkswagen provides scale, strengthening their shared platform initiatives. In early January 2025, Volkswagen also announced a promising new joint venture with XPeng Inc. (XPEV) to deploy 20,000 charging piles spanning 420 Chinese cities. A charging pile differs from a charging station as a stand-alone unit that can be placed in residential homes, commercial buildings and public roadways. Discussions about co-branding charging stations are also underway. Founded in 2014 and catering to tech-savvy drivers, XPeng officially launched the world’s first artificial intelligence-defined vehicle in November 2024.
In December 2024, a massive data breach involving Volkswagen’s software subsidiary, Cariad, exposed sensitive location data and personal contact details of more than 800,000 customers. This incident highlights the growing cybersecurity challenges automakers face as vehicles increasingly collect and store vast amounts of customer data.
9. Bayerische Motoren Werke AG (BMW.DE)
The BMW Group, headquartered in Munich, Germany, encompasses the BMW, Mini and Rolls-Royce brands, as well as motorcycle production and financial services.
BMW has fallen in the market capitalization ranking over the last year, slipping from No. 7 to No. 9. After beginning 2024 on a strong note, the company ended the year with a 13.4% sales decline in China, which accounts for one-third of its global EV sales. Recognizing China’s critical role as a growth market, BMW is pushing forward with a comprehensive upgrade of Plant Dadong, its first production facility in China. Additionally, it is investing in a 10 billion-yuan sixth-generation battery project in Shenyang to support the 2026 launch of its Neue Klasse EV models. The Neue Klasse, rooted in the 1960s BMW 1500, embodies BMW’s future vision for “digitalization, electrification and sustainability.” The first Neue Klasse EV rolled off the assembly line at BMW’s Hungarian plant in late November 2024.
Despite challenges in Asia, BMW continues to delight and engage its target market with exclusive offerings and innovations. At the 2024 Monterey Car Week, Rolls-Royce unveiled the pre-sold Phantom Scintilla Private Collection and the one-off Spectre Semaphore EV, its first and only Rolls EV. BMW auctioned a one-of-a-kind 2025 BMW M5 Pebble Beach Concours d’Elegance, featuring an exclusive Frozen Orange metallic finish and gold brake calipers, raising $280,000 for charity. Also at Pebble Beach, BMW introduced the M5 Touring plug-in long-range hybrid for the U.S. market. With an MSRP of $125,275, the new model, weighing in at an additional 1,100 pounds, faced early skepticism for its heft, but the 717 horsepower powertrain has delighted M5 aficionados. Looking ahead, BMW is set to make its return to racing in 2026 with the M2, reinforcing its dedication to performance and motorsport heritage.
8. Mercedes-Benz Group AG (MBG.DE)
A premier luxury car company, Mercedes-Benz Group has corporate roots going back to 1886. Renowned for its Mercedes-Benz, AMG, Maybach and EQ vehicles, the German automaker has been working to restore its luxury brand prestige after years of declining stock performance.
Since August 2024, Mercedes-Benz has seen a steep decline, losing $18.75 billion in market capitalization and tumbling from No. 5 to No. 8 in the rankings. Mercedes, too, faces challenges in the Asian market, with a 7% annual sales decline in China, which accounts for 30% of its global sales. Mercedes CEO Ola Källenius, has been a vocal advocate for improving EU-China economic relations, aiming to reduce punitive tariffs through economic partnerships. Källenius and execs of other German automakers have warned that retaliatory measures from Beijing could exacerbate the EU automotive industry’s economic challenges.
Mercedes-Benz’s marketing momentum stalled in 2024 after iconic Formula One driver Lewis Hamilton announced his move to Ferrari for the 2025 racing season. Hamilton was expected to conclude his illustrious career with Mercedes, but Ferrari presented an opportunity that better aligned with his driving style. Analysts are still weighing the impact on Mercedes’ near-term stock performance with the loss of potential sponsorships.
Electrification remains a central focus for Mercedes-Benz, with standout models such as the off-road-ready G-Class G580 and the all-electric AMG GT 63 S, rivaling the Porsche 911 Turbo S. In 2023, the automaker showcased its hybrid McLaren Artura supercar, reflecting both its advancements and untapped potential. Looking to 2026, Mercedes plans to launch the ultra-luxurious Maybach SL 680 Monogram Series, followed by the fully electric Maybach EQS SUV, further reinforcing its commitment to luxury and sustainability. Despite its EV ambitions, Mercedes-Benz continues to develop internal combustion engine (ICE) vehicles, exemplified by the 2024 Mercedes-AMG CLE53. This model replaces the C- and E-class coupes, offering 443 horsepower and standing as the only two-door Mercedes priced for less than $100,000.
7. General Motors Co. (GM)
Founded in 1908 by William Durant as a holding company for Buick, General Motors rapidly expanded through acquisitions, going public in 1916. In 1921, it patented leaded gasoline as an anti-knock agent, solidifying its reputation as an innovator. Once a symbol of American spirit, GM faced setbacks due to globalization. Its pioneering EV1 electric car failed to gain traction, and in 2009, after receiving $17.4 billion in bailouts, GM declared bankruptcy, preserving over 1 million jobs and $35 billion in tax revenue.
Under Mary Barra, who took the helm as CEO in 2014, GM has pursued EV leadership with the Chevrolet Bolt and investment in Cruise, its autonomous vehicle subsidiary.
In a surprising turn of events, GM is excelling in Asia, but still recently took a $5 billion write-down on its Chinese business. That said, GM China is chugging along nicely, with deliveries jumping 40.6% quarter over quarter in Q4. In a significant milestone, GM officially sold more EVs and plug-in hybrid models in China than ICE cars for the first time. Their electrified lineup accounts for over 50% of sales.
Legal challenges have emerged, with the NHTSA investigating engine bearing failures in 877,710 vehicles and the FTC banning GM from sharing driver data for five years due to privacy violations with its OnStar Smart Driver feature.
In late 2024, GM dramatically shifted its strategy for Cruise, its $10 billion autonomous vehicle unit, after a pedestrian incident led to California revoking Cruise’s robotaxi permits. While originally expected to generate revenue of $50 billion by the end of the decade, GM has ceased robotaxi development, redirecting Cruise’s resources to driver-assistance technologies, a move expected to save $1 billion annually.
6. Porsche Automobil Holding SE (OTC: POAHY)
Stuttgart-based Porsche, a 94-year-old German automaker, is renowned for its legendary 911. After struggling in the 1990s with high costs and dwindling production to just 15,000 units, the brand was revitalized by the Boxster, which attracted younger buyers. Recently, Porsche marked 50 years of the 911 with a special edition 2025 911 Turbo 50 Years, limited to 1,974 units.
Porsche has held the sixth position, but experienced $13.9 billion in lost market capitalization over the last year. Challenges in the Asian market have also significantly impacted Porsche’s performance. In 2024, Chinese sales fell 28%, dragging global deliveries down 3% despite growth in every other market.
With China as Porsche’s second-largest market, senior leaders are reevaluating key strategies. Electrification challenges have sparked rumors that the Macan, Porsche’s second-best-selling SUV, may remain an ICE model rather than transitioning to all-electric. Additionally, discussions are underway about relocating production of the all-electric Taycan from Stuttgart.
Even Porsche’s racing plans are being reviewed. Last year, the company disappointed fans by formally dropping plans to rejoin Formula One, choosing to focus fully on Formula E with the Porsche 99X Electric, highlighting EV performance. Porsche also planned to race the Porsche 963 in the FIA World Endurance Championship (WEC) and the North American International Motor Sports Association (IMSA) series. However, recent comments from the company indicate renewed interest in Formula One.
Collectors remain captivated by Porsche’s legacy, exemplified by the planned Mecum Kissimmee 2025 auction of the iconic 1970 Porsche 917K (917-022), driven by Steve McQueen in the film “Le Mans.” Widely regarded as one of the most recognizable race cars in history, the vehicle drew a historic $25 million bid, but its current owner, comedian Jerry Seinfeld, declined the offer.
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5. Ferrari NV (RACE)
Founded in 1947, Ferrari is headquartered in Maranello, Italy. Known for its high-value sports cars, Ferrari enjoys some of the strongest global brand recognition in the industry. Committed to preserving its image of exclusivity and luxury, Ferrari follows a low-volume, high-profit model. Still, it is modestly increasing its deliveries, which are expected to hit a record in 2024 despite remaining well below the 20,000 globally. Despite this achievement, its market capitalization slipped from No. 4 to No. 5 over the last year, with a $7.49 billion decline.
Ferrari famously spends nothing on advertising, relying on its racing performance to speak for itself. The brand’s dedication to elite racing has also produced elegant sports cars that hold their value remarkably well for collectors. Ferrari’s stock soared when it signed Lewis Hamilton for the 2025 Formula One season. Frenzy was high for Hamilton’s unofficial first run in Fiorano, Italy. His official debut will be the season opener at the Australian Grand Prix.
Ferrari continues to innovate, planning its first all-electric model in late 2025 as a 2026 model. Priced at $535,000, the prototype has been spotted in camouflage at its new facility near Maranello. Meanwhile, the 2025 Purosangue SUV, a 12 cylinder, 715-horsepower four-seater, lists for $433,686. By 2026, Ferrari aims for EVs and plug-in hybrids (PHEVs) to account for 60% of sales.
Investing in Ferrari also offers the unique potential for both stock and product appreciation. At the 2024 Monterey Car Week, the very first 1960 Ferrari 250 GT California By Scaglietti was publicly sold for $17,055,000. Chassis 1795 GT, one of just 56 produced, was crafted in the same Maranello facility that continues to produce the prancing horses, exemplifying Ferrari’s enduring legacy of master craftsmanship and value.
4. BYD Co. Ltd. (OTC: BYDDY)
BYD, short for “Build Your Dreams,” was founded in 1995 by Wang Chuanfu in Shenzhen, China. Starting as a mobile battery manufacturer, the company has since diversified into budget-friendly EVs, trucks, buses, solar panels and monorails. In 2022, BYD transitioned entirely to EV production, leveraging vertical integration to maintain control over its battery supply — a strategy akin to Tesla’s. BYD’s expertise in batteries, the cornerstone of electric applications, is bolstered by its internal supply of critical components.
BYD’s market capitalization grew by $11.59 billion in 2024, despite slipping to No. 4 in the rankings. The company achieved record-breaking sales of 4.27 million EVs and plug-in hybrids in 2024, marking a 40% year-over-year increase. In Q4 2024 alone, BYD delivered approximately 595,000 EVs globally, significantly surpassing Tesla’s 496,000 deliveries during the same period. In November 2024, BYD became the first automaker to produce its 10-millionth new energy vehicle. To support its growth, BYD launched the world’s largest car carrier, the BYD Shenzhen, capable of transporting 9,200 vehicles per voyage.
Amid trade tensions with the U.S., BYD has focused on expanding into European markets. In August 2024, the EU proposed revised trade tariffs on Chinese imports, with BYD receiving a 17% proposed tariff compared to Tesla’s more favorable 9%. Concerns from European automakers have prompted leaders to explore innovative ways to reduce tariffs and encourage partnerships across borders.
BYD surprised the supercar market with the launch of the Yangwang U9, its first electric supercar. The U9 became the first Chinese vehicle tested at Germany’s Nürburgring, benchmarking its performance against global competitors. With 1,200 horsepower, the $233,000 U9 accelerates from 0 to 62 mph in just 2.36 seconds, faster and significantly less expensive than comparable Ferraris and Lamborghinis. It boasts a top speed of 192 mph, showcasing BYD’s ambition to rival established luxury brands.
3. Xiaomi Corp. (OTC: XIACF)
Headquartered in Beijing, Xiaomi is best known as the world’s second-largest smartphone manufacturer, trailing only Samsung. Founded in 2010 by serial entrepreneur Lei Jun, the company has been dubbed the “Apple of China.” It became the youngest company to join the Fortune Global 500 and went public in June 2018 on the Hong Kong Stock Exchange.
In 2024, Xiaomi debuted on the market capitalization rankings with a value of $57.3 billion. By the end of the year, it had soared to the No. 3 spot, doubling its market cap to $115.8 billion.
Xiaomi entered the electric vehicle market in March 2021 with a $10 billion investment, acquiring autonomous driving startup Deepmotion for $77 million shortly after. Its EV subsidiary, Xiaomi Auto, partnered with BAIC Group to unveil the SU7 sedan in late 2023, with deliveries beginning in March 2024. In July 2024, Xiaomi secured a production license, enabling independent vehicle manufacturing. Its factory, located in the Beijing Economic-Technology Development Area, leverages the proprietary Hyper Die-Casting 79100 Cluster system, which allows the facility to produce an SU7 every 76 seconds at full capacity.
In less than a year, Xiaomi delivered an impressive 135,000 units of its flagship SU7 electric sedan. Looking ahead to 2025, Xiaomi looks to more than double production with the launch of its first electric SUV, the YU7.
With aspirations to become one of the top five automakers globally, Xiaomi was featured in Time Magazine’s 2024 list of influential companies. Growth and momentum investors are chasing it as they seek to catch the wave on China’s economic rise.
2. Toyota Motor Corp. (TM)
Toyota had long held the crown as the world’s most valuable car company, but was toppled by Tesla in 2020. Founded in 1933, this Japanese company is headquartered in the eponymous city of Toyota in the Aichi prefecture and includes Lexus, Subaru and Suzuki among its marques.
Despite retaining its No. 2 position in market capitalization, Toyota has faced challenges, losing $10.89 billion in market value since August 2024. In a surprising shift, Chinese automaker BYD narrowly outsold Toyota in Japan — a market traditionally dominated by Toyota.
Toyota revolutionized the auto industry with the Prius, one of the first hybrid vehicles, which became the darling of eco-conscious consumers in the early 2000s. Over time, however, environmental advocates criticized hybrids for not fully embracing decarbonization. Toyota, long criticized for lagging in EV adoption, defended its focus on hybrids and alternative technologies. Chairman Akio Toyoda has argued that EVs will ultimately cap at 30% of the global market, with hybrids, hydrogen fuel cells and alternative green fuels playing a significant role in future mobility.
In 2024, Toyota responded to these challenges with the redesigned Prius hybrid, earning praise for its sleek styling and impressive 57 miles per gallon fuel efficiency. For 2025, the model remains largely unchanged but has been rebranded as the “Prius PHEV.” The success of this strategy has prompted Toyota to phase out most internal combustion engine models in favor of hybrids across both Toyota and Lexus brands. However, Toyota continues to offer a mix of powertrains to cater to shifting consumer demands. The sixth-generation 4Runner, launching in 2025, will feature both internal combustion and hybrid versions, with the hybrid model entering production in February.
Toyota remains a strong choice for value investors trading at less than 10 times earnings, and the company is pursuing sustainability efforts while garnering positive reviews for its flagship models. With more than two decades of hybrid production, Toyota’s pre-owned hybrids continue to dominate reliability rankings, further solidifying its reputation for quality and longevity.
1. Tesla Inc. (TSLA)
Tesla continues to captivate as it evolves from its early days with its sublime Roadster into a conglomerate offering a full lineup of EVs, including semitrucks. The company has positioned itself as more than just an automaker, striving to build a sustainable planet through renewable energy, advanced storage solutions, AI and connectivity.
Under CEO Elon Musk’s leadership, Tesla’s market capitalization has soared, doubling from $689.6 billion in August 2024 to nearly $1.4 trillion, surpassing the trillion-dollar milestone. Tesla maintains strong momentum in China, where the Model Y became the country’s best-selling car in 2024 with more than 480,000 units sold. The company recently unveiled a redesigned Model Y, featuring a refreshed exterior and enhanced interior, generating 50,000 preorders on its first day. Despite a slight dip in market share, Tesla still commands a dominant 50% of the global EV market.
Competition is heating up, with Chinese automakers Xiaomi and BYD challenging Tesla with budget-friendly EVs. To counterpunch, Tesla has stated plans to launch an affordable EV in the $25,000 price range in 2025. Its semitruck has also garnered widespread acclaim, with PepsiCo. Inc. (PEP) as its major customer. A new factory in Nevada is set to begin mass production in 2025, with a goal of manufacturing 50,000 semis annually.
Tesla’s ambition is to retain its top spot in the market, but it wants to do so with a bit of flair and fun. The highly anticipated Tesla Diner and Drive-In in Hollywood is finally nearing completion. Designed as a nostalgic “golden age” dining experience, it reflects Musk’s vision of a unique gathering place for Tesla owners, blending technology, sustainability and fun.
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The 10 Most Valuable Car Companies in the World originally appeared on usnews.com
Update 01/23/25: This story was previously published at an earlier date and has been updated with new information.