3 EV Stocks Offering Unique Alternatives to Tesla

Key Points

• Despite Tesla's massive rally in recent years, a recent deliveries disappointment and other incidents may have soured some investors on the world's largest car company.
• A number of other EV makers experienced share declines in the last year, potentially presenting an opportunity for investors to enter positions at a favorable time.
• Chinese EV makers Li Auto and NIO and American firm Rivian are all notable alternatives to Tesla.

Tesla Inc. NASDAQ: TSLA has had an incredible stock run, climbing by more than 68% in the last year and an incredible 1,139% in the last five years as of January 9, 2025. The electric car giant remains the largest auto manufacturer worldwide by market cap—at $1.24 trillion, it is about five times as large as the next-biggest automotive company.

Despite this massive success, there are plenty of reasons investors may have recently soured on Tesla. A growing number of Wall Street analysts are rating TSLA either Sell or Hold on the calculation that shares have become overvalued; the consensus price target of around $293 is more than 25% below current levels as of January 9. 2024 deliveries of Tesla vehicles fell by more than 2% year-over-year, the first time this figure has dropped in that timeframe and a significant concern for a company that has previously aimed for a 50% annual deliveries growth rate. And high-profile incidents related to the company—a New Year's Day explosion of a Cybertruck in Las Vegas in a possible act of terrorism and the increasingly polarizing political behavior of CEO Elon Musk—may also be driving investors elsewhere.

Fortunately, EV alternatives, including Li Auto Inc. NASDAQ: LI, Rivian Automotive Inc. NASDAQ: RIVN, and NIO Inc. NYSE: NIO, give investors looking beyond Tesla many good options.

Li Auto: Targeting the Budget-Friendly EV Market

While Tesla shares have skyrocketed in recent months, Chinese EV maker Li Auto has headed the opposite direction—shares of LI are down nearly 30% in the year leading to January 9, 2025. The EV market in China more broadly struggled in 2024 in the face of numerous headwinds, including lagging demand, a high-intensity price war, and concern about the impact of regulations on the industry.

On the other hand, Li has also moved in the opposite direction of Tesla when it comes to vehicle deliveries, with a new record of more than half a million vehicles sold in 2024 and a 16.2% year-over-year increase in vehicles delivered in December. Li made moves to target the budget-friendly end of the EV market with its L6 model, the most affordable of its vehicles. The firm also improved its autonomous driving system to include highway and city driving capabilities, helping it stand out in a crowded space.

While LI shares remain a Hold based on analyst ratings, the consensus price target for the stock comes in at $33.94, more than 46% ahead of where shares currently trade.

Rivian Automotive: Impressive Fourth Quarter, Shortage Resolved

Shares of American EV firm Rivian are down about 26% in the last year, but they spiked by about 15% in early January 2025 after the company announced better-than-expected fourth-quarter delivery figures. The 14,183 vehicles Rivian delivered in the last quarter of 2024 was more than 5% above consensus estimates across Wall Street and a 42% improvement over the prior quarter.

Two other important factors signal that Rivian may be off to a good start in 2025: first, the impressive delivery figure came during a time of year that is typically lower than usual in terms of EV deliveries, making it even more notable; and second, Rivian announced at the same time that its component shortage that began in October has been resolved. This should free the company up to produce all of its models at a regular pace heading into 2025 and should allow its partnership with Volkswagen—Rivian will provide software for upcoming Volkswagen EVs—to continue uninterrupted as well.

Analysts are cautiously optimistic about Rivian shares, with 10 out of 25 across Wall Street rating the firm a Buy.

NIO: Notable End-of-Year Deliveries

Like Li and Rivian, NIO shares have also been down in the last year—a plunge of nearly 43% sent the stock well below $5. However, NIO's more than 31,000 vehicles delivered in December, an increase of 73% year-over-year, are a bright spot for the company.

While Li may be focusing on the budget end of the EV market, NIO has plans to expand across the spectrum. Its budget-friendly Onvo line saw sales roughly double from November to December, and production is expected to continue to scale up going forward. NIO is also launching new SUVs this year and making headway in the compact EV market with its Firefly line, which analysts expect to boost the company's position in Europe. It's no surprise, then, that analysts see more than 32% of upside potential for NIO shares.