Electric cars — commonly called electric vehicles or EVs — are automobiles with engines powered by electricity rather than gas. Electric car stocks comprise companies primarily focused on manufacturing electric cars. Companies that manufacture the components used in electric cars — such as batteries or autonomous vehicle systems — can also be considered part of the electric car industry.
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Even though all the major car companies, including Ford (F -2.38%) and General Motors (GM -1.13%), are developing and/or manufacturing at least one model of electric car, they’re not usually considered electric car companies because their primary products aren’t electric. The best electric car company stocks are generally companies focused solely on electric cars rather than traditional automakers producing primarily gas-powered vehicles.
List of EV stocks
Electric car stocks on the map
| Company | Headquarters | Notable Models |
|---|---|---|
| Tesla (NASDAQ:TSLA) | Palo Alto, California | Model 3 and Model S sedans, Model X and Model Y crossovers |
| NIO (NYSE:NIO) | Shanghai, China |
ES8 and ES6 SUVs, EC6 crossover |
| Rivian (NASDAQ:RIVN) | Irvine, California | R1T truck, R1S SUV |
1. Tesla: The industry leader
Any list of electric car stocks should include the granddaddy of them all, Tesla. Elon Musk’s electric car company delivered more than 1.8 million vehicles in 2023. Most of the vehicles were Model 3 sedans and Model Y crossover SUVs, and the rest were Tesla’s older, pricier models.
Despite a tough macroeconomic backdrop, Tesla continues to aggressively expand production. Production is currently ramping up at Tesla’s factories in Texas and Germany, and the company is building a new factory in Mexico.
Tesla has resorted to price cuts to sell vehicles this year as consumer demand faltered, a move that has hurt the bottom line. In the second quarter of 2024, Tesla’s overall gross margin slipped by 23 basis points year over year to 18%, while its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin contracted to 14.4% from 18.7% during the same period in 2023. The company is still profitable, but profits are trending lower.
Through the first half of 2024, Tesla stock plunged as investors balked at the company’s weakening financials — an abrupt turnaround from the stock’s steep rise in 2023. Shares, nonetheless, are expensive by any measure. With a market capitalization currently topping $642 billion, Tesla stock trades at lofty price-to-earnings and price-to-sales ratios. The valuation makes the stock risky, but there’s no denying the company is the leader in the electric vehicle industry.
2. NIO: A Chinese SUV specialist
Chinese electric car maker NIO has been publicly traded since September 2018, but several initial public offerings (IPOs) by other Chinese electric car makers — such as Li Automotive (LI -1.91%) and Xpeng(XPEV -3.35%) — have increased investor interest in NIO.
NIO is facing a challenging environment in China. The company reported 30,053 vehicle deliveries in the first quarter of 2024, a year-over-year drop of 3.2% and an even sharper decline of 39.9% from the fourth quarter of 2023. As to be expected, total vehicle revenue also dipped lower, and the company’s net loss widened to $718 million. Management, however, expects deliveries of 54,000 to 56,000 in Q2 2024, representing year-over-year increases of 129.6% to 138.1% .
NIO launched its second smart EV brand, Onvo, in May 2024, as well as the Onvo’s first vehicle, the L60. The company characterizes the L60 as “a family-oriented smart electric mid-size SUV.”
3. Rivian: A lot to prove
Investors were very excited about Rivian when the EV company went public in late 2021. It was one of the biggest U.S. IPOs ever, with the company raising almost $12 billion. Rivian’s market value briefly topped $150 billion soon after its debut.
Rivian had barely delivered any of its electric trucks or SUVs when it went public, so investing in the stock was the ultimate leap of faith. The company managed to produce more than 1,000 vehicles in 2021, a tiny number compared to Tesla and other large automakers. Deliveries exceeded 9,600 vehicles in the first quarter of 2024, and the company says it’s on track to produce 57,000 vehicles in 2024.
Rivian is taking a risk by vertically integrating critical components like electronics, the propulsion platform, and software. The strategy may pay off if the company can rapidly grow production over the next few years, but it also means costs will be higher in the near term.
Rivian is nowhere near profitable, with a negative gross margin in the first quarter of 2024. It reported a net loss of $1.45 billion on revenue of $1.2 billion. Rivian has almost $8 billion in cash on its balance sheet, so it can afford to lose vast sums as it ramps up production. But if the company hits a roadblock, it could be in serious trouble.
Revenue
Revenue is a business’s gross income or the amount of money it brings in from regular operations before costs are considered.
Rivian stock dove 43% through the first six months of 2024, but it has shown signs of recovering in the second half of the year. The company is valued at just over $14 billion, which doesn’t seem expensive relative to sales. A lot will need to go right, though, for Rivian to deliver for investors.
Other EV companies
Other companies in the electric car space
Building a successful electric vehicle business is an expensive proposition, and the bankruptcies of Lordstown Motors and Fisker in 2023 and 2024, respectively, are good reminders that investing in this sector is inherently risky. After struggling with production issues, Lordstown and Fisker both ultimately filed for Chapter 11 bankruptcy.
If you want to diversify your portfolio exposure to the electric car sector and stay away from controversy, an alternative is to buy stock in any of these companies:
- QuantumScape (QS -4.4%): Maker of EV lithium batteries
- Blink Charging (BLNK -4.5%): Producer of electric car charging stations
- Hyliion (HYLN -3.4%): Manufacturer of EV drivetrains
- Luminar (LAZR 1.39%): Maker of autonomous driving technologies, such as Lidar
- Ballard Power Systems (BLDP -4.66%) and Plug Power (PLUG -1.01%): Developers of hydrogen fuel cell vehicle technologies
Yet another option is to buy shares of Lucid Group (LCID -9.09%). The luxury electric car maker produced just over 2,110 vehicles in the second quarter 2024, and it’s set a goal of producing 9,000 vehicles for 2024.
Lucid raised $1 billion in additional capital in May 2024, which will help cover its losses as it scales up production. Lucid stock is pricey, valued at $7 billion despite Q1 2024 revenue of less than $173 million, so investors should tread carefully.
Image source: Getty Images.
ETFs
Electric car ETFs
Investors seeking portfolio exposure to the electric car market who don’t want to select individual stocks can buy shares in exchange-traded funds (ETFs). There are plenty of options when it comes to electric vehicle ETFs, including some that specialize in clean energy, which are often popular with ESG investors.
Fidelity Electric Vehicles and Future Transportation ETF (FDRV -1.04%) is a fairly small but focused choice and includes many of the stocks noted above. It also includes companies like Uber (UBER 1.05%), ON Semiconductor (ON -1.3%), and Garmin (GRMN 0.68%), adding to the diversification of the offering while remaining true to EV-enabling technologies. Tesla is the largest holding at just more than 5.4%.
The Invesco WilderHill Clean Energy ETF (PBW -1.93%), which tracks the performance of the WilderHill Clean Energy Index, invests broadly in clean energy. Although no single stock comprises more than 4% of the fund’s holdings, the ETF owns the stocks of plenty of electric car makers. The stocks of NIO, Tesla, and Rivian are all held by WilderHill. The fund also owns shares of Blink Charging, lithium-ion battery maker Albemarle (ALB -6.92%), and Plug Power.
The Global X Autonomous & Electric Vehicles ETF (DRIV -0.99%) invests in makers of electric and self-driving cars. But the fund mainly focuses on traditional automakers making forays into this space, such as Toyota (TM -0.37%), and large tech companies, including semiconductor powerhouse Nvidia (NVDA 4.08%) and Alphabet (GOOG -0.87%L) (GOOG -0.87%), which is developing autonomous vehicles.
Why the EV industry is different
What makes the electric car industry different?
The electric car industry differs from the traditional automotive industry because it is so new. Until recently, very few companies manufactured any kind of electric vehicle, but every major automaker in the world is developing or producing an EV now.
Because major interest in electric cars is so recent, the only established industry leader is Tesla. Start-up EV makers can compete fairly well with traditional automakers for electric car market share, making it difficult to discern which companies will ultimately dominate the market. That unpredictability makes investing in the electric car industry riskier than adding portfolio exposure to the automotive industry as a whole.
Related investing topics
Future of EVs
The future of the electric car industry
Multiple major automakers have recently adopted Tesla’s EV charging technology, making it likely to become the standard in the U.S. This standardization should make purchasing and charging EVs simpler, which could help drive growth in the industry.
Many companies participating in the EV sector are going public, while legacy automakers plan to release a plethora of electric vehicles over the next five years. Investing in this highly competitive and fast-growing industry is likely to be profitable, but it’s important to take steps to minimize your investment risk. Don’t invest in just one electric car company; hold positions in several companies of various sizes, and consider buying shares in an ETF.