There’s an unrelenting competition to dethrone Tesla, as the world’s most notable EV company. In fact, there are dozens of EV firms and electric vehicle stocks ying for Tesla’s crown. In the U.S., legacy automakers continue to pour significant resources into diversifying their respective product mixes toward electric vehicles. The same is true for other notable, household-names, and legacy automakers globally. In China, the world’s largest EV market, a handful of manufacturers have established strong market share and continue to show massive potential. In the U.S., the picture is the same with a few SPAC-funded upstarts emerging as legitimate threats to Tesla’s market dominance.
Electric Vehicle Stocks: Ford (F)
Investors continue to be very interested in Ford (NYSE:F) stock because of the EV opportunity. Ford’s stock is priced inexpensively both in terms of its $13 share price and its P/E ratio which makes it cheaper than 86% of industry competitors. The general notion is that as Ford directs substantial resources into EV development its share price can rapidly increase. That thought stems from the massive valuations afforded to EV companies including Tesla. It is a generational opportunity that Ford cannot afford to ignore.
Ford is telegraphing a massive continued investment and expects its EV production rate to reach 600,000 vehicles by late this year. It expects for production rate to reach 2 million vehicles annually by 2026. Ford’s EV push efforts have not translated into skyrocketing share prices as yet. Early in 2022, Ford quashed rumors that it might spin off its EV vehicles as a separate company. Such a move would imply significantly higher valuations but remains conjecture at this point.
Electric Vehicle Stocks: General Motors (GM)
General Motors (NYSE:GM) stock is subject to many of the same factors as Ford’s in relation to electric vehicles. The same potential benefits apply to GM as it continues its EV development. Like Ford, General Motors’ stock is undervalued based on traditional metrics including its P/E ratio.
General Motors delivered 39,179 EVs in 2022. Those EV vehicle deliveries accounted for 1.7% of the company’s U.S. leading 2,274,088 vehicle deliveries during the year. That puts GM in an interesting position as it relates to EV leaders and its own approach toward the market. Given that GM’s internal combustion vehicles are top sellers in the U.S. market it would be unwise to lean too heavily into EVs, potentially eroding its strength. But at the same time, if GM wants to eventually surpass Tesla’s sales, it cannot wait forever. Tesla delivered 1.31 million vehicles in 2022. That means for every General Motors EV delivered, Tesla delivered 33.2 EVs.
Electric Vehicle Stocks: Toyota (TM)
Toyota (NYSE:TM) is the strongest legacy competitor challenging Tesla for dominance of electric vehicle stocks. The company sold 9.56 million vehicles during the period between Jan. and Nov. Its strongest competitor, Volkswagen (OTCMKTS:VWAGY), delivered 8.3 million vehicles in all of 2022, making Toyota the leading global automobile by sales volume for the third straight year.
Toyota sold 504,016 electric vehicles in the U.S. in 2022. The rub here is that Toyota sells a significant number of hybrid-electric vehicles as a portion of those strong overall sales.
Toyota has stated that it plans to launch 30 fully electric vehicles in the future. The company is known for its generally conservative business operations. If something isn’t broken, Toyota doesn’t ‘fix’ it. That’s a big part of the reason the company is leaning more slowly into developing an all-electric lineup than its competitors. The other part of that slower development is the fact that Toyota’s electric-hybrid technology has been so successful and is so well regarded.
Nio (NYSE:NIO) is one of the marquee names when it comes to Chinese electric vehicle stocks to buy. It has become synonymous with China’s booming EV industry with the company delivering 122,486 total vehicles in 2022. That figure represented a 34% increase in deliveries year-over-year. The company delivered 15,815 vehicles during the month of Dec. alone. That was an increase of 50.8% YoY, as well as a record monthly high.
The company remains a homegrown upstart champion in a Chinese market that is the world leader in EVs. There were 5.67 million EVs (1)sold in China in 2022. More than 4 million of those were all-electric vehicles.
Nio will remain an important manufacturer challenging Tesla into the future. But as a stock, NIO shares have certain issues worth noting. The shares sit decidedly in the growth sector which has been marked by a severe decline as the Fed reins in inflation with rising interest rates. Nio’s revenues increased 32.6% in Q3, to $1.83 billion. However, it reported a net loss of $577.8 million at the same time. This climate makes it very volatile.
It will probably surprise readers to learn BYD (OTCMKTS:BYDDY) is the world’s largest seller of EVs. The company delivered 1.86 million EVs in 2022, significantly outpacing Tesla and its 1.31 million deliveries during the same period.
The Chinese manufacturer sold a record 235,197 EVs in Dec. alone. U.S. investors may be less familiar with the name simply for the fact that Nio trades its shares on the New York Stock Exchange while BYD’s shares trade over the counter. That said, BYD stock is higher priced – implying more safety – and possesses significant upside beyond its current price.
BYD sold 683,440 EVs in the fourth quarter, up 157% on a year-over-year basis. The company is interesting for several reasons. Warren Buffett backs the firm which is expecting to deliver roughly 2 million vehicles in 2023. That’s similar to what many analysts expect Tesla to deliver in the coming year.
The other interesting aspect of the competition between the two firms is that BYD delivered fewer all-electric vehicles in 2022, 911,140, than Tesla and its 1.31 million all-electric deliveries.
Lucid (NASDAQ:LCID) is aiming directly for Tesla’s Model S. The company is led by former Tesla executive Peter Rawlinson. Lucid’s large Air lineup competes directly with Tesla’s Model S vehicle that dominates the EV luxury range. The positive news for Lucid is that Tesla sells far fewer Model S vehicles than it does Model 3 and Model Y. Tesla delivered 23,464 Model S vehicles between January and September last year.
Meanwhile, Lucid delivered 1,932 of its Air sedans in Q4 while producing 3,493 in total. Lucid has dealt with wavering production expectations throughout the last year. Production was expected to hit 20,000 and was then reduced to a range between 12-14,000. That was again reduced to a range between 6-7,0000. Lucid ended up producing 7,180 vehicles during 2022, an arguable success.
What’s important to note about Lucid is that the company models Tesla in many respects. It completed its own manufacturing plant and can absolutely erode the Model S’ market share if its Air sedan lineup performs well.
Fisker (NYSE:FSR) is a company that you want to see succeed. The company developed EVs for some time but failed to meet the mark. However, it reinvented itself during the pandemic, seizing upon a wave of SPAC funding that the company used to reinvigorate its brand. The company utilized blank-check funding to design and outsource the manufacturing of its Ocean SUV to Magna International (NYSE:MGA) rather than investing in expensive, ground-up manufacturing.
The result is that the company began production of the Ocean SUV on time, Nov. 17, 2022, as promised. The company owns the intellectual property associated with the Ocean, which had caused controversy recently. Fisker plans to produce 42,400 Ocean vehicles in 2023 with 15,000 deliveries expected in Q3. U.S. production could begin in 2024 as well. The Ocean is priced from $37,499, making it a lower-priced alternative to many of its competitors already for sale in the U.S.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.