Tesla Competitors: 7 Rival EV Stocks to Buy

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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 that will challenge Tesla’s dominance. Bank of America estimates Tesla’s U.S. EV market share will drop from 62% in 2022 to just 18% by 2026.

Here are seven of the best EV stocks to buy other than Tesla, according to Bank of America:

Nio Inc. (NIO) 19.4%
Li Auto Inc. (LI) 38.4%
Rivian Automotive Inc. (RIVN) 85.4%
General Motors Co. (GM) 121.3%
Toyota Motor Corp. (TM) 23.4%
Ford Motor Co. (F) 89.5%
Ferrari NV (RACE) 22.1%

Nio Inc. (NIO)

Nio produces and sells premium battery EVs, mainly in China. The company recently reported 20,462 vehicle deliveries in July, up 103.6% year over year. Analyst Ming Hsun Lee says NIO’s delivery momentum should continue in the second half of 2023. Lee says NIO’s recently announced strategic agreement with China National Offshore Oil Corp. to jointly build charging and battery swap infrastructure will also improve its customers’ user experience and boost sales volumes. He says Nio’s new model rollouts will help it gain additional market share. Bank of America has a “buy” rating and $15.40 price target for NIO stock, which closed at $12.90 on Aug. 11.

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 34,134 vehicle deliveries in July, up 227.5% from a year ago. Li also said it delivered its 400,000th vehicle. Lee says Li Auto benefits from robust demand in the Chinese luxury EV market, and its flagship model, Li Mega, is on track to be launched by the end of 2023. Bank of America has a “buy” rating and $56 price target for LI stock, which closed at $40.47 on Aug. 11.

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 raised its 2023 production guidance to 52,000 vehicles, more than double its 2022 production. Rivian produced 23,387 vehicles in the first half of 2023, and production was up 50% on a quarterly basis in the second quarter. Analyst John Murphy says Rivian is one of the most viable EV startups and is a threat to legacy automakers. Bank of America has a “buy” rating and $40 price target for RIVN stock, which closed at $21.57 on Aug. 11.

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 many EV startups are unprofitable and trade at steep valuations, GM reported $2.6 billion in net income in the second quarter and trades at just 4.8 times forward earnings. Murphy says GM’s strong legacy business is helping the company ramp up its investments in EV and autonomous vehicle technology. Bank of America has a “buy” rating and $75 price target for GM stock, which closed at $33.89 on Aug. 11.

Toyota Motor Corp. (TM)

Japan’s Toyota Motor is one of the world’s largest automakers. The company plans to produce about 3.5 million EVs per year by 2030. In June, Toyota shocked the EV world by announcing a breakthrough in advanced solid-state battery technology that could eventually boost driving ranges by a claimed 50% to more than 900 miles on a single charge. Analyst Kei Nihonyanagi says Toyota plans to increase its plug-in hybrid EV variety in the China market in the near term while developing its battery EV technology as a long-term solution. Bank of America has a “buy” rating and $206.39 price target for TM stock, which closed at $167.28 on Aug. 11.

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. Ford’s EV sales jumped 126% last year. The Ford F-150 Lightning was the best-selling EV pickup, with 15,617 units sold. Murphy says Ford’s EV division losses have been steeper than expected, but the company is making progress in transitioning to next-generation technology. Bank of America has a “buy” rating and $23 price target for F stock, which closed at $12.14 on Aug. 11.

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 says it will invest about $4.6 billion in developing full EV models and plug-in hybrids, which will make up 60% of its lineup by 2026. Ferrari plans to complete construction of its first EV plant in mid-2024 and roll out its first EV model by the end of 2025. Murphy says Ferrari has a strong order backlog extending to 2025. Bank of America has a “buy” rating and $380 price target for RACE stock, which closed at $311.19 on Aug. 11.

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