The electric vehicle (EV) market is in its transitional period. New companies are entering the market, competition is getting fiercer every day, and the market is no longer dominated by a single powerhouse like Tesla (NASDAQ:TSLA). Specifically, Chinese EV manufacturers are growing in popularity, and their presence and sales are growing globally. As a result, EV stocks are becoming more diverse and competitive. In fact, it’s been almost a year since Chinese EV powerhouse BYD Company (OTCMKTS:BYDDF) overtook Tesla’s number one EV seller spot. 

As a whole, the EV market had a poor year in 2023. Due to macroeconomic conditions, the demand for overall electric vehicles has gone down and customers are simply not as excited as they were when EVs first came out. While the growth of electric vehicles has slowed down, according to industry data, the industry is still growing and there is still potential. Especially considering that the electric vehicle market is heavily dependent on interest rates, and the Fed is expected to start rate cuts soon, investors look into buying EV stocks. Below are the three best electric vehicles stocks to buy instead of Tesla.  

Li Auto (LI)

Li Auto (NASDAQ:LI) is an electric vehicle manufacturer based in Beijing, China. The EV maker specializes in premium and luxury SUVs, and putting strong emphasis on long range electric vehicles. Li Auto has been dominating the Chinese EV market, and while the company has publicly stated it will take time before expanding overseas, it announced plans to open its first after-sales service store in Kazakhstan this month. 

In terms of recent sales records, there is a lot to like about Li Auto. In June 2024, Li Auto delivered 47,774 vehicles, an impressive 46.7% increase year-over-year. This contributed to over 100,000 deliveries in the second quarter, which was up more than 25% from Q2 2023. 

While the stock price stands just under $20 as of writing, analyst ratings indicate a new target price for Li Auto at $34.95. Li Auto has momentum, and with the expected interest cuts in the near future, its sales and revenues are only going to accelerate. 

Nio (NIO)

The Chinese electric vehicle maker Nio (NYSE:NIO) is another EV stock that should be on investors’ watchlist. While the stock is down nearly 50% year-to-date as of writing, there are still reasons to be bullish about Nio. 

Last month alone, Nio delivered 21,209 vehicles last month, which was a 98.1% increase from the previous year. Moreover, in the second quarter of 2024, the Chinese EV pioneer achieved 143.9% growth in sales YOY. 

While Nio primarily focuses on luxury EVs, its management is expanding the product line to stay competitive in the market. Intended to target the masses, Nio will start to offer more affordable EVs with a starting price tag under $30,000. This car will be under Nio’s new sub-brand Onvo, and Nio’s new model L60 is 10% cheaper than its intended competitor Tesla’s Model Y. This strategic expansion will help increase Nio’s customer base. 

BYD Company (BYDDF)

BYD Company (OTCMKTS:BYDDF) is the leading electric vehicle seller globally, owning 18% of the global EV market. On top of being the largest EV seller in the world, BYD is also ranked as the second biggest power battery producer. This is a field that BYD has been investing in aggressively, and compared to the past year, BYD’s installed power capacity and energy storage batteries went up by more than 35% as of writing. 

One of the main positives is its adaptability and growth in nondomestic markets. While most of its sales are made domestically, BYD has been expanding its presence into foreign markets recently, threatening established Western EV makers like Tesla. In June 2024, BYD sold 26,995 vehicles overseas, a 156.22% increase YOY. In the second quarter of 2024 as a whole, BYD sold nearly 1,000,000 new energy vehicles (NEV), which was 57.56% up from the previous quarter.

On the date of publication, Andy Kim 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.

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.