Electric cars -- commonly known as electric vehicles or EVs -- are automobiles that rely on electricity stored in batteries for power instead of gas used in internal combustion engines. 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.
Many of the major car companies, like Ford (F +0.53%), are developing and/or manufacturing at least one model of electric car. The best electric car company stocks range from companies focused solely on electric cars to traditional automakers that are expanding their lineups to include electric cars.
While the ending of the federal tax credit for EVs, which provided up to $7,500 for new electric cars and $4,000 for used EVs, ended on Sept. 30, 2025, there's sufficient reason to believe that this bump in the road in the U.S. market will not result in the demise of consumer interest in EVs. According to a recent survey conducted by The Motley Fool, while 80% of respondents said they don't own a hybrid or electric vehicle, 57% of respondents affirmed that they were somewhat or very likely to make a hybrid or electric car or truck purchase for their next vehicle.
Electric car stocks on the map
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Tesla (NASDAQ:TSLA) | $1.6 trillion | 0.00% | Automobiles |
| Nio (NYSE:NIO) | $10.3 billion | 0.00% | Automobiles |
| Rivian Automotive (NASDAQ:RIVN) | $26.0 billion | 0.00% | Automobiles |
| General Motors (NYSE:GM) | $77.2 billion | 0.69% | Automobiles |
| BYD Company (OTC:BYDDY) | $131.6 billion | 1.54% | Automobiles |
| Li Auto (NASDAQ:LI) | $13.9 billion | 0.00% | Automobiles |
| Volkswagen Ag (OTC:VWAGY) | $36.1 billion | 5.82% | Automobiles |
1. Tesla: An industry leader
NASDAQ: TSLA
Key Data Points
Any list of electric car stocks should include the granddaddy of them all, Tesla. While some customers have taken exception to Elon Musk's ventures with the Department of Government Efficiency (DOGE) in Washington, D.C., the electric car company still demands respect as a force driving the EV industry forward after delivering more than 1.21 million vehicles through the first three quarters of 2025. 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.
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 third quarter of 2025, Tesla's overall gross margin slipped by 185 basis points year over year to 18%. Still, it succeeded in expanding its free cash flow to $3.99 billion -- a 46% year-over-year increase.
With a market capitalization currently topping $1.5 trillion, Tesla stock trades at lofty price-to-earnings (P/E) and price-to-sales (P/S) ratios. The valuation makes the stock risky, but there's no denying the company is a leader in the electric vehicle industry.
2. NIO: A Chinese SUV specialist
NYSE: NIO
Key Data Points
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 Xpeng(XPEV -0.66%) -- have increased investor interest in NIO.
NIO is benefiting from strong customer demand in China. After reporting 221,970 vehicle deliveries in 2024 -- a 38.7% increase from 2023 -- NIO enjoyed continued growth in 2025, reporting 87,071 vehicle deliveries in Q3 2025, 40.8% higher than the same period in 2024. Through the first three quarters of 2025, NIO has delivered 201,221 vehicles, representing a 34.8% increase over that which it reported during the same period in 2024.
As expected, total vehicle revenue also rose. In 2024, NIO posted vehicle revenue of about $7.98 billion, representing year-over-year growth of 18.2%. In addition, NIO expanded its gross profit margin from 5.5% in 2023 to 9.9% in 2024.
NIO further expanded its product line with the deliveries of the ET9 starting in March 2025, a vehicle that NIO characterized as "a flagship smart executive sedan" on its fourth quarter 2024 conference call.
3. Rivian: This EV maker keeps trucking along
NASDAQ: RIVN
Key Data Points
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 equaled 51,579 vehicles in 2024, and the company projects vehicle deliveries of 40,000 to 46,000 vehicles in 2025. The delivery outlook may be lower than 2024, yet it reflects the company's plan to pause production lines at its plant in Illinois for one month in late 2025 in preparation for the launch of production of its R2 model in the first half of 2026.
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.
Although it's still incurring net losses, it's making progress towards profitability. In Q3 2025, Rivian reported a gross profit of $24 million compared to a gross loss of $392 million in Q3 2024.
Rivian had $7.1 billion in cash on its balance sheet as of Sept. 30, 2025, 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
4. General Motors: An old name with a new approach
NYSE: GM
Key Data Points
Legacy automaker GM may not be a name that investors immediately recognize as an electric car company, but that may change before long. While the company is still committed to the production of internal combustion engine vehicles, it's also enthusiastic about its prospects regarding electric vehicles.
The company has built serious momentum towards reimagining itself as a company steering towards electric vehicle popularity among drivers. Despite the challenges facing electric car makers with federal consumer incentives ending, Mary Barra, the company's CEO, affirmed in the company's Q3 2025 letter to shareholders that "electric vehicles remain our North Star, and I am proud of the way our portfolio of Cadillac, Chevrolet and GMC EVs have connected with customers."
Unlike many EV companies that are reinvesting in their businesses to spur innovation, GM is rewarding shareholders with a modest dividend in addition to reinvesting in the company. As of December 2025, GM stock provided investors with a 0.7% forward-yielding dividend.
5. BYD: Holding the pole position in the EV industry
OTC: BYDDY
Key Data Points
Since BYD's EVs aren't visible on America's highways and byways, investors may be less familiar with the Chinese conglomerate despite its market dominance. According to research from The Motley Fool, BYD is the global leader in EV production. In 2024, BYD manufactured 4,036,538 EVs -- battery EVs and plug-in hybrid EVs -- miles ahead of Tesla, which produced 1,787,944
EVs. Investors who follow Warren Buffett, however, may recognize BYD as the company that provided the only EV exposure in the Berkshire Hathaway (BRK.A +0.09%) (BRK.B +0.17%) portfolio for some time, though Berkshire Hathaway closed its position in 2025.
BYD Company operates other businesses such as monorails and electronics, but its EV business demands respect considering its dominant leadership position. In Q3 2025, for example, BYD Company reported sales of 1.11 million vehicles.
With its strong industry position, it seems highly unlikely that a competitor will overtake BYD as the dominant global EV business anytime soon. For investors seeking a more conservative EV stock opportunity, BYD deserves serious consideration.
6. Li Auto: An up-and-coming Chinese brand
NASDAQ: LI
Key Data Points
Li Auto represents another Chinese company that deserves to be on EV investors' radars. Compared to BYD, which first offered an EV to customers in 2008, Li Auto is a newer name on the EV scene in China that began scaling production of its EVs in 2019. Since then, the company has made tremendous progress in grabbing a larger slice of the Chinese EV market. As of November 2025, the company had 544 retail stores in 157 cities and 556 servicing centers and Li Auto-authorized body and paint shops. Helping customers to keep their (electric) motors running, Li Auto also has 3,614 supercharging stations equipped with 20,027 charging stalls.
Consistently providing drivers with new options, Li Auto launched a six-seat battery electric SUV, the Li i8, in July 2025, and it subsequently launched a more affordable battery electric SUV, Li i6, which management expects will reach a production capacity of 20,000 units by early 2026.
While not consistently profitable -- it reported a net loss of $87.7 million in Q3 2025 -- Li Auto reported net income of $153.1 million in Q2 2025. Its sizable cash position of $13.9 billion (as of Sept. 30, 2025) suggests Li Auto is well-positioned to endure temporary market downturns while also providing resources to reinvest in the business and create new EV models.
7. Volkswagen AG
OTC: VWAGY
Key Data Points
While investors of a certain age may not be able to separate Volkswagen from the VW Beetles that were popular in the 1960s and 1970s, today's Volkswagen is equally focused on luxury. It owns Audi, Bentley, Bugatti, and several other exclusive brands, as well as economical offerings. The company is committed to expanding its presence in the EV market, and it's proving successful at winning over customers. In the first half of 2025, Volkswagen Group reported a 47% year-over-year increase in electric vehicles.
Beyond its current vehicle offerings, Volkswagen has demonstrated a commitment to advancing the EV industry with its investment in solid-state battery developer QuantumScape (NYSE:QS), an investment that amounts to about $460 million and a 17% ownership stake. Volkswagen also formed a joint venture with Rivian in 2024 to scale EV platforms.
A company on firm financial footing, thanks to its consistent and robust profitability, Volkswagen is another strong contender for investors seeking exposure to the EV industry, yet who are concerned about risk exposure.
Other companies in the electric car space
Building a successful electric vehicle business is an expensive proposition, and the bankruptcies of Lordstown Motors in 2023 and Fisker in 2024 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: Maker of EV lithium batteries
- Mobileye (MBLY +0.10%): Maker of autonomous driving technologies, such as Lidar
- Ballard Power Systems (BLDP +0.75%) and Plug Power (PLUG +2.44%): Developers of hydrogen fuel cell vehicle technologies
Another option is shares of Lucid Group (LCID +1.55%). After producing 9,029 vehicles in 2024, the luxury electric car maker projects significant growth, forecasting 2025 production of approximately 18,000 vehicles. Lucid delivered 10,241 vehicles in 2024, a 71% increase over 2023 deliveries.
Lucid raised about $4.2 billion in additional capital in 2024, which will help cover its losses as it scales up production. Lucid stock is pricey, valued at $7.75 billion despite 2024 revenue of $808 million, so investors should tread carefully.
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 +0.21%) is a fairly small but focused choice and includes many of the stocks noted above. It also includes companies like Uber (UBER +0.22%), ON Semiconductor (ON -1.09%), and ChargePoint (CHPT +0.28%), adding to the diversification of the offering while remaining true to EV-enabling technologies. Chinese battery maker CATL is the fund's largest holding.
The Invesco WilderHill Clean Energy ETF (PBW +0.41%), which tracks the performance of the WilderHill Clean Energy Index, invests broadly in clean energy. Although it includes a variety of renewable energy stocks, the ETF holds shares of plenty of electric car makers. The stocks of NIO, Tesla, and Rivian are all held by WilderHill. The fund also owns shares of lithium-ion battery maker Albemarle (ALB +1.23%) and Plug Power.
The Global X Autonomous & Electric Vehicles ETF (DRIV +0.28%) 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 -1.15%), and large tech companies, including semiconductor powerhouse Nvidia (NVDA -0.32%) and Alphabet (GOOG -0.00%L) (GOOG -0.00%), which is developing autonomous vehicles.
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 the 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.
Pros and cons of investing in electric car stocks
Because individual investing goals vary, there's no single answer as to whether parking an electric car stock in your portfolio is a smart idea. It's beneficial to recognize the clear benefits of gaining exposure to electric car stocks.
- Electric car stocks provide the potential for significant growth. Grand View Research estimated the global electric car market size to be $1.3 trillion in 2024 and forecasts it to rise to reach USD $6.5 trillion by 2030, growing at a compound annual growth rate (CAGR) of 32.5% from 2025 to 2030.
- While investment goals may vary, portfolio diversification is a crucial element of any investment strategy, and electric car stocks could help achieve this goal.
- Investing in electric car stocks often provides exposure to the autonomous driving industry, which is also expected to experience significant growth in the years to come.
Of course, investors must also recognize the risks related to electric car stock investments:
- If a downturn in the economy occurs, consumers may be less inclined to purchase new cars -- let alone electric cars.
- When oil prices are low, the allure of owning an electric car diminishes for some people, so lower energy prices could hinder the growth of electric car manufacturers.
- In the past, government incentives have contributed to increased adoption of electric cars; however, the elimination of these incentives could reduce customer demand for electric cars.
Factors to consider before investing in electric car stocks
Since the electric car industry is still relatively young, investors must be flexible in their approach to evaluating potential investments. With respect to legacy carmakers -- like General Motors and Volkswagen -- that have focused on expanding their lineups with electric models, investors should verify the companies' investments are proving to be profitable by using the earnings per share (EPS) metric to assess their financial health and the price-to-earnings (P/E) ratio to evaluate the stocks' price tags.
For less-established companies, investors will want to monitor whether they are growing revenue, as they're likely to be unprofitable. Similarly, since the P/E ratio will be useless for companies that are still incurring net losses, investors will want to use the P/S ratio to gauge the stocks' valuations.
How to invest in electric car stocks
For investors charged up about powering their portfolios with EV stocks, there are only a few simple steps they need to take:
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected, and adjust your investment strategy accordingly.
Related investing topics
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.
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