Not so long ago, it seemed that automakers’ biggest challenge was how to get bigger and better electric vehicles (EVs) to market at a price point competitive with Chinese upstarts like Xiaomi and BYD. The incoming Trump administration had signaled renewed fondness for expansive tariffs to level the U.S. playing field for Tesla and General Motors. But, the impact was still largely unknown for the European marques until more details emerged.
All this has changed in what Bank of America is calling the “EV head-fake.” In the firm’s annual “Car Wars” report, published in June 2025, analyst John Murphy indicated that the industry’s outsized bet on EVs had failed to deliver. Despite making deep investments, retooling production lines and investing significantly in electric battery research and development, consumer demand fell off sharply.
[Sign up for stock news with our Invested newsletter.]
The unprecedented disruption and uncertainty surrounding the low EV adoption amid significant price wars with China have left CEOs scratching their heads as to their next pivot. Murphy continues, “The next four+ years will be the most uncertain and volatile time in product strategy ever.” While many new models are announced, only 29 models will likely occur on schedule, the lowest number in decades.
Chinese manufacturers, operating in the world’s largest sales market, have an especially turbulent future as they fight an internal price war and seek to sidestep the tariffs now that President Trump’s plans are more fully understood. Demand has fallen significantly despite aggressive price cutting, resulting in an average car retail price around 19% lower than in the previous two years.
The industry is hoping that hybrids and plug-in hybrids will bridge the EV adoption gap, while rejuvenating several internal combustion engine (ICE) models. Murphy also noted that technology may prove to be a viable road, saying that “connected ownership experiences are where the money is.” Manufacturers are hoping that dealers are able to increase their 40% capture rate of first-owner service revenue with little additional capital outlay, which can also bode well if expected maintenance revenue declines from greater EV adoption.
But, the customers have to be able to afford any purchase, too. With the average new vehicle MSRP hitting a historic high of $50,968, Edmunds reported that, nearly 19.3% of new?car shoppers had monthly payments exceeding $1,000. Lending Tree reports that 40.3% of these high-dollar loans originated in 2024 with many loans now extending for 72 months. With the Trump administration accelerating the phase-out of federal subsidies in the recently passed “One Big Beautiful Bill,” even fewer EV buyers may materialize.
Affordability, flexibility and connectivity will be the guiding forces for these manufacturers in the remainder of the year.
Here are the 10 most valuable auto companies by market capitalization in 2025:
| Car Company | Market Capitalization | Position Change** |
| 1. Tesla Inc. (ticker: TSLA) | $1.1 trillion | ?+0 |
| 2. Toyota Motor Corp. (TM) | $252.8 billion | ?+0 |
| 3. Xiaomi Corp. (OTC: XIACF) | $174.8 billion | ?+0 |
| 4. BYD Co. Ltd. (OTC: BYDDY) | $132.3 billion | ?+0 |
| 5. Ferrari NV (RACE) | $80.0 billion | ?+0 |
| 6. Bayerische Motoren Werke AG (BMW.DE) | $62.3 billion | ?+2 |
| 7. Mercedes-Benz Group AG (OTC: MBGYY) | $58.7 billion | ?+0 |
| 8. Volkswagen AG (OTC: VWAGY) | $58.1 billion | ?-2 |
| 9. General Motors Co. (GM) | $51.6 billion | ?+0 |
| 10. Porsche (P911.DE) | $48.9 billion | Returning |
*As of Aug 12.**Since last article update on May 21.
10. Porsche (P911.DE)
Stuttgart-based Porsche, a 94-year-old German automaker, is renowned for its legendary 911. Porsche previously held the sixth position having $54.07 billion in market capitalization, but fell out of the top 10 last quarter when Maruti Suzuki India squeezed past them. Porsche’s trajectory had already been looking grim after losing $13.9 billion in market capitalization in early 2025, following a disastrous $21.8 billion loss in 2024. Porsche doubled down on its fundamentals in order to regain its footing.
Porsche boosted revenue by raising prices as much as 3.6%, which enhanced investor confidence, and embraced lean efficiency principles culminating in its Leipzig plant earning this year’s Automotive Lean Production Award in the Original Equipment Manufacturer (OEM) category. OEMs play a crucial role in defining vehicle quality, reliability and performance.
9. General Motors Co. (GM)
Founded in 1908, General Motors quickly grew through acquisitions and early innovation. Once a proud symbol of American industrial strength, GM struggled in the face of globalization and filed for bankruptcy in 2009. Mary Barra’s ascension to the CEO role in 2014 has proven to be transformative for GM through her deep embrace of EVs, a revitalization of GM’s core brands of Chevrolet, Buick, GMC and Cadillac and an eye for innovation and partnership.
While earlier this year, GM saw a nearly $3 billion decline in market capitalization, it’s quickly regained that back. GM doubled its U.S. EV market share to 12% in Q4 2024, behind Tesla’s 44.4%, aided by a growing EV lineup and aggressive pricing. It continues to show promise in Asian markets, despite intense competition from the Chinese. While it is primarily exempt from Trump’s tariffs as an American-based company, less than half its sales come from domestic production. In response, GM is investing $4?billion in U.S. production and hopes to increase U.S. production by 300,000 units. It has also retreated from its ambitious EV aspirations to a more rounded lineup.
GM recently announced a new alliance with Hyundai seeking to co-develop five new models across all engine types in North and South American markets by 2028. GM will leverage its expertise with the mid-size truck platform, while Hyundai will focus on compacts and EV commercial vans, seeking to sell 800,000 units. GM has also officially acquired Cruise. While it has ended the robotaxi program, it has pivoted the technology to Super Cruise, its hands-free driving system. With more than 500,000 vehicles already on the road, GM expects to generate $2 billion in annual revenue within five years.
8. Volkswagen AG (OTC: VWAGY)
Headquartered in Wolfsburg, Germany, Volkswagen has built its legacy and loyal customer base since 1937 on iconic models like the Beetle and Golf. Its strong R&D capabilities and technical depth has enabled the company to take the beloved Microbus and reimagine it in 2022 as the all-electric “ID Buzz.” Volkswagen proudly accepted the 2025 North American Utility Vehicle of the Year award for the ID Buzz in January 2025 at the Detroit Auto Show.
The Volkswagen Group oversees a complete portfolio of prestigious brands, including Volkswagen, Audi, Porsche, Lamborghini, Bentley, Bugatti, ?koda, SEAT, Ducati, Scania and MAN, and continues to evolve through electrification, digitalization and global restructuring. However, it’s grappling with deep infrastructure issues, prolonged labor negotiations and complex governance that precludes it from closing expensive domestic factories. In response, it has halted the majority of its EV models launches, including the popular Golf replacement, the ID.2 and the ID EVERY1, a compact EV priced at €20,000. Even the XPENG collaboration appears to have slowed in regards to the ultra-fast EV charging piles announced earlier this year, although the Turing AI chip still seems to be on track for the Chinese market in 2026. Citing these internal headwinds, ongoing Chinese competition and tariff woes, Moody’s downgraded Volkswagen’s credit rating from A3 to Baa1 in March 2025.
The Dieselgate scandal continues to cast a decade-long shadow across the company’s reputation. The scandal has cost the company €34.8?billion with the meter still running. The ethical fall-out has not only damaged the company financially and reputationally, but launched a public health and environmental crisis that studies indicate have resulted in a large number of premature deaths and new childhood asthma cases.
7. Mercedes-Benz Group AG (OTC: MBGYY)
With corporate roots dating back to 1886, Mercedes-Benz Group stands as a premier name in the luxury automotive sector. Known for its prestigious Mercedes-Benz, AMG, Maybach and EQ brands, the German automaker has been working to reclaim its status in the high-end market following a period of underwhelming stock performance. It’s already seeing positive results in India with its upscale line, despite a volatile luxury market.
Like its peers, Mercedes continues to grapple with geopolitical headwinds. CEO Ola Källenius, as head of the European Automakers’ Association (ACEA), has emerged as a leading voice in calling for stronger E.U.-China economic ties, seeking to ease tensions and reduce retaliatory tariffs that threaten to intensify challenges for the European auto sector. Facing significant cost pressures from the new U.S. tariffs, he is already stepping into negotiations to reduce them in exchange for U.S.-based investments, including its plans to produce the GLC SUV at its Alabama facility by 2027. In keeping with this industry position, Källenius is planning the company’s biggest product launch in history with 18 new models slated for reveals in 2027 across all segments. The company has also cracked down on efficiency; mid-year financials are already showing robust results. Finally, the company has seized more than 1.5 million counterfeit Mercedes products, ensuring brand integrity.
Electrification and innovation remain at the heart of Mercedes-Benz’s strategic vision. While the Mercedes me Charge platform has already scaled to over 2 million global charging points, it is now transitioning to a more comprehensive platform called MB.CHARGE Public.
6. Bayerische Motoren Werke AG (BMW.DE)
The BMW Group, headquartered in Munich, Germany, encompasses the BMW, MINI and Rolls-Royce brands, along with a robust motorcycle division and financial services arm. Like many global automakers, BMW has been impacted by the recent tariffs, but already has a significant presence in Spartanburg, South Carolina that it is successfully leveraging to negotiate greater production. This has enabled BMW to hold firm on its 2025 financial outlook, a rare position among its peers.
BMW has regained two positions to move into the 6th spot due to a 32.4% increase in Q1 2025 EV sales, plus solid increases throughout Europe and North America. It has invested heavily in local operations, including a major upgrade to its historic Plant Dadong and a new 10 billion-yuan sixth-generation battery facility in Shenyang. Set to debut in 2026, it is the final lynchpin in the company’s long-term strategy. Known as the Neue Klasse platform, it is a complete reimagining of the brand’s vehicle architecture rooted in the legacy of the BMW 1500 from the 1960s. Neue Klasse represents a leap forward in digitalization, electrification and sustainability, promising 30% longer range, 30% faster charging and 40% lower drivetrain production costs. The first models to launch — starting with the iX3 SUV and a fully electric 3 Series sedan — will begin production in late 2025 at BMW’s Debrecen plant in Hungary. A high-performance M3 variant is also in development. At the core of these vehicles will be the new “Heart of Joy” control unit, which integrates and optimizes key functions such as drivetrain, braking, steering, energy regeneration and battery management.
5. Ferrari NV (RACE)
Founded in 1947 and headquartered in Maranello, Italy, Ferrari remains one of the most globally recognized luxury brands. With a focus on exclusivity, it maintains a premium-priced, low-volume, high-profit strategy that has helped it retain its No. 5 global ranking. Despite an almost $9 billion reduction in market capitalization since last quarter, Ferrari continues to deliver robust financial results with increasing net revenue while maintaining both high annual margins and stellar liquidity. Ferrari has responded to tariffs by raising prices as much as 10%. Ferrari, under the branding message, “Tradition to Tomorrow,” is seeking to broaden its legacy buyer toward a younger demographic. CEO Benedetto Vigna has ensured that Ferrari has maintained its heritage base, a demographic comprising 98% men that heavily skews between 35 and 55, and over-indexes towards entrepreneurs, highly educated and affluent people who often collect multiple vehicles. Most importantly, 48% of its buyers make repeat Ferrari purchases. Ferraris hasn’t lost its Midas touch with this group; instead, it has expanded its buyers under age 40 to account for 40% of sales, a significant year-over year increase. While late to fully electrify, the company’s first EV model, the Ferrari?Elettrica, is priced at $535,000 and will debut on Oct. 9.
4. BYD Co. Ltd. (OTC: BYDDY)
Founded in 1995 by Wang Chuanfu in Shenzhen, China, BYD (an acronym for “Build Your Dreams”) began as a mobile battery manufacturer before evolving into a diversified leader in electric vehicles, trucks, buses, solar panels and monorails. Since shifting exclusively to EV production in 2022, BYD has relied on vertical integration to control its battery supply chain, mirroring Tesla’s strategy. Its deep in-house expertise in batteries and power electronics remains central to its success. These capabilities vaulted BYD to a dominating in-country market share of 34%. BYD further strengthened its international logistics by launching the BYD Shenzhen, the world’s largest car carrier. Capable of transporting 9,200 vehicles, the ship began its maiden voyage on April 27, 2025, delivering more than 7,000 units from China to Brazil, a market where BYD saw 328% growth in 2024.
Alongside Xiaomi and BYD, a small handful of Chinese brands represent 61% the total Chinese auto market, having driven foreign brands to a record low of 37%. It has accomplished this feat through a 30% to 40% cost advantage, enabling these companies to put aggressive pricing pressure on foreign competition.
While BYD operates electric bus and truck facilities in California, 100% U.S. tariffs have blocked its passenger vehicle entry. BYD had originally planned to focus on Europe, aligning with BYD’s target to sell half of its vehicles outside China by 2030. To facilitate this sales thrust, they opened a new hub in Hungary for sales, after-sales service, vehicle testing and localized model development. However, the U.K., in response to the pricing pressures, replied with a 27.5% tariff, effectively crippling BYD’s ability to expand competitively into these markets. The company’s lightning-fast growth has also created other quality control, safety and environmental issues, most notably large-scale recalls, fire risks, unsuitable labor issues and factory pollution concerns.
3. Xiaomi Corp. (OTC: XIACF)
Headquartered in Beijing and founded in 2010 by serial entrepreneur Lei Jun, Xiaomi rose rapidly to become the world’s second-largest smartphone maker after Samsung. Xiaomi entered the EV market in 2021 with a $10 billion investment — and it’s paying off. In 2024, Xiaomi debuted on the market capitalization leaderboard at $57.3 billion and closed the year ranked No. 3 globally among automakers. While it continues in the third position, it’s now increased its market cap to $174.8 billion. It’s having fun becoming an EV powerhouse, setting an Nürburgring lap record for production EVs with its SU7 Ultra.
Alongside BYD, Xiaomi is putting intense competitive pricing pressure on both domestic and international EV rivals. Xiaomi came into 2025 with tremendous momentum, scaling rapidly with its production targets. There continues to be considerable demand for the YU7, their first electric mid-size crossover SUV that debuted in late May and has Tesla’s Model Y squarely in its sights. The YU7 racked up 240,000-plus pre-orders in just 18 hours, signaling the immense buzz and anticipation from consumers.
Xiaomi’s transition into EVs is seen as a bold, but calculated, diversification beyond its consumer electronics roots. Its strength lies in ecosystem integration: MIUI, IoT devices and AI features are being embedded into its vehicles, positioning it as a true “tech automaker” in the same vein as Tesla. This vision helped Xiaomi earn a spot on TIME’s 2024 list of Most Influential Companies and fueled a 50% surge in its Shenzhen-listed stock over the past six months.
2. Toyota Motor Corp. (TM)
Toyota, founded in 1933 and headquartered in its namesake city in Japan’s Aichi Prefecture, has long been synonymous with reliability and innovation. While it once held the title of the world’s most valuable automaker, it was overtaken by Tesla in 2020. Today, Toyota maintains a strong global presence, including well-known marques such as Lexus, Subaru and Suzuki. The company has held steady at the No. 2 position in global market capitalization and has increased its market cap by $5 billion over the past quarter. Toyota epitomizes quality, dependability and durability, both as a company and through its products.
Like its other foreign peers, Toyota faces headwinds with EV production demand, tariffs, foreign exchange losses and rising material costs. U.S. tariffs alone have cut into its profits with a 37% drop in income. However, longtime Chairman Akio Toyoda has held steady leadership and made key adjustments, while CEO Koji Sato has indicated that price adjustments are on the table to offset these pressure. Toyota invests heavily in R&D and holds a leading edge in hybrid and hydrogen fuel-cell tech, two areas that are gaining great attention in battery innovation. This also complements its battery capacity investments, including a $14 billion battery plant in North Carolina and another production facility in Shanghai. The rugged, all-electric 2026 bZ Woodland is expected to go on sale in early 2026, joining Toyota’s refreshed bZ and the new C-HR, a compact electric crossover.
Of course, Toyota also revolutionized the auto industry with the Prius, one of the world’s first mass-market hybrids. With the shift in EV trends, Toyota is leaning in on its two-decades long hybrid legacy with renewed focus.
1. Tesla Inc. (TSLA)
Tesla continues to captivate as it evolves from its early, sublime Roadster into a fully diversified mobility and energy conglomerate. Under CEO Elon Musk’s leadership, Tesla remains globally synonymous with EV innovation, enjoying immense brand recognition, early market dominance and significant consumer and investor loyalty. Tesla’s market capitalization has soared, doubling from $689.6 billion in August 2024 to nearly $1.4 trillion in January 2025, the first time an automaker has surpassed this milestone. Yet, much like one of SpaceX’s rockets, gravity began pulling Tesla back from the stratosphere. Tesla’s valuation later dipped below $1 trillion following a wave of political backlash tied to Musk’s controversial role as head of the Trump administration’s Department of Government Efficiency (DOGE).
Though Musk’s foray into politics absolutely affected buyer sentiment, Tesla’s changes in fortune coincided with the rising competitive pressure from Chinese EV makers, Xiaomi and BYD. Both have aggressive business plans focused solely on displacing Tesla. Their relentless global expansion strategies rapidly siphoned demand directly from Tesla, particularly in export markets. With healthy cash reserves and gross margins, Tesla’s market capitalization found renewed equilibrium at a $1.1 trillion value.
As Tesla continues to broaden its global brand appeal, the next decade will test its ability to innovate even faster to compete with these relentless challengers. China is the world’s largest EV market and Tesla is already responding with key product upgrades to hold Xiaomi and BYD at bay. Tesla has picked up a nice tail wind with the harsh tariffs currently levied against Chinese electric vehicles. Xiaomi and BYD have also had to take their eye off Tesla in order to manage the melee with their Chinese counterparts. This break in focus is giving Tesla new opportunities, not only for EV innovation, but also autonomous technology, battery endurance and range, supercharger networks, energy storage, rocket spaceships, robotaxis, artificial intelligence (AI) and even humanoid robotics.
More from U.S. News
5 Best Solar Stocks to Buy Today
15 Best Dividend Stocks to Buy Now
All 16 Fed Chairs Ranked by Stock Market Performance
The 10 Most Valuable Car Companies in the World originally appeared on usnews.com
Update 08/14/25: This story was previously published at an earlier date and has been updated with new information.
