EV Stocks Are Booming But Tesla Might Not Be The Best Bet
The EV market in 2025 has seen global sales increase 29% year-to-date. Nonetheless, trade policy uncertainties and the potential reduction of EV tax credits could impact adoption rates.
Geopolitical tensions also disrupt EV supply chains (i.e., especially for critical minerals, batteries, and semiconductors). In turn, this could raise costs, delay production, and prompt a reshaping of trade and sourcing strategies.
Tesla’s European sales have declined nearly 40% in early 2025, influenced by political controversies surrounding CEO Elon Musk and intensified competition from Chinese manufacturers like BYD.
Additionally, the company’s focus on robotaxis has raised concerns about Tesla’s ability/willingness to meet mass-market EV demand. Given its high valuation and the challenges of executing on various capital-intensive projects, investing in Tesla now carries significant risk.
Investors might consider other EV manufacturers such as BYD, which has surpassed Tesla in global sales and offers a vertically integrated supply chain, and Hyundai, which has expanded its US manufacturing footprint with a new $7.6 billion EV facility in Georgia.
In the EV supply chain, companies like CATL, the leading EV battery manufacturer, and Broadcom, a key supplier of custom chips for AI applications, could be potential investment opportunities due to their critical roles in EV production and technological advancements.
Looking ahead, EVs are projected to account for approximately 25% of new car sales by the end of 2025, driven by the technological innovations they bring to the auto market and increasing consumer demand for sustainable transportation options.