Tesla Competitors: 11 Rival Electric Car (EV) Stocks To Buy In 2022

Tesla’s dramatic success has finally convinced investors that we are going to see a lot more electric cars on the road over the next decade. Tesla has certainly produced outsized returns for believers. If you are convinced that the transition to EVs will be swift, what are the stocks (other than Tesla) that you could invest in? Here is a list of Tesla competitors you should watch in 2022.

SustainFi   Updated March 22nd, 2022

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Should you still invest in Tesla and electric cars?

Despite climate change concerns and Tesla’s brand power, U.S. electric car penetration is only 3%. Some of that is because there just aren’t many attractive models apart from Tesla, which holds a 70% market share. But EV penetration should only grow from a low base.

Transportation accounts for a fifth of U.S. carbon emissions. It is clear that the electrification of cars will help the environment, and available options are expanding fast. The Infrastructure Bill has promised $7.5 billion to expand the nationwide EV charging network. And, over the past decade, the range of EVs has improved a lot, while EV battery prices dropped an astonishing 89%.

However, EV stocks dipped in 2022 as concerns about rising interest rates and inflation made highly valued growth stocks unattractive. EV makers have also suffered from chip shortages, while the cost of “green metals” like lithium and copper has skyrocketed.

But, assuming that EV penetration grows, this could be an opportunity to invest. More EV upstarts should start delivering cars in 2022, so that Tesla will no longer be the only pure-play EV company with real manufacturing capabilities.

Of course, the risks of investing in EV startups remain. Traditional manufacturers with decades of car-making experience are going all-in on electric vehicles. The charging infrastructure is still poor, potential customers suffer from road trip anxiety, and charging an EV still takes longer than a gasoline-powered car. EVs cost more than gasoline-powered cars, too.

EV startups with little revenue still trade at high valuations – they will need to show real sales to justify them. Some of them have been targeted by short-sellers or investigated by the Securities and Exchange Commission. It is likely that not all EV startups will survive. But investors who can pick a winner will be rewarded.

How is Tesla different from its competitors?

Tesla started with a unique business model at the time, giving it a competitive advantage. However, as more well-funded companies try to copy Tesla, its edge could erode over time.

First-mover advantage and branding

Tesla was the first company to commercialize electric cars. Today, it has by far the best-known electric car brand worldwide. Tesla started in the premium market, and its cars are perceived to be cool, not just eco-friendly. Tesla’s eccentric founder and CEO, Elon Musk, is core to the carmaker’s brand. His key insight was to market to people who want a cool car, not exclusively to the environmentally-conscious crowd.

Direct-to-consumer (D2C) business model

Unlike traditional carmakers, which rely on franchised dealers, Tesla sells directly to consumers. The company owns a network of showrooms, mostly located in city centers. The slick showrooms reinforce Tesla’s premium branding. Customers have a better experience buying from Tesla’s experts, as opposed to dealers trying to sell them something they don’t want. Customers can also buy online with a few clicks.

EV charging stations

Tesla has the largest network of EV charging stations in the United States. So far, they haven’t made it compatible with non-Tesla EVs. Although there are many startups building EV charging infrastructure accessible to all EV models, it’s going to be a grind. As a result, Tesla customers have a better charging experience, and Tesla has an edge.

Tesla software

Tesla’s emphasis on software and autonomous driving set it apart from the crowd. Software updates make the cars better over time, which is not the case with traditional cars. You can argue that Tesla is really a tech company, and its valuation seems to reflect that.

Who are Tesla competitors?

Tesla has two types of competitors: traditional automakers trying to get into electric cars and startups like Rivian and Polestar that have raised enough money from investors to be a threat. Both are dangerous in different ways.

Traditional carmakers like Ford and General Motors have over a century of experience making cars. Rival startups may not have the manufacturing experience, but they are unencumbered by a long legacy and can copy Tesla’s differentiators, like a direct-to-consumer business model.

Tesla competitors list

  • Rivian Automotive (RIVN)
  • Lucid Group (LCID)
  • Fisker Inc (FSR)
  • Ford Motor Company (F)
  • General Motors (GM)
  • NIO (NIO)
  • Li Auto Inc (LI)
  • Xpeng (XPEV)
  • BYD (BYDDF)
  • Faraday Future Intelligent Electric Inc (FFIE)
  • Nikola (NKLA)

Read more about each company.

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1. Rivian Automotive (RIVN)

  • Market capitalization: $40 billion
  • 2022 return: -56%

Founded in 2009 by RJ Scaringe, the electric truck and SUV startup Rivian went public in November 2021 without any sales. However, the Amazon and Ford-backed car-maker has since released the first electric pickup truck on the market, the R1T truck, named the 2022 MotorTrend Truck of the Year. The writers said it was the most remarkable pickup truck ever.

Rivian’s Normal, Illinois plant has a planned capacity of 200,000 trucks per year. The company also plans to construct a Georgia facility to add the capacity for another 400,000 EVs, with production starting in 2024. Rivian targets 1 million in annual car sales by 2030.

Although Rivian burns a lot of cash, including a planned $8 billion in capex in 2022-2023, it raised $13.7 billion in the IPO. The U.S. SUV and pickup truck market is huge, including roughly 60% of passenger cars sold in the U.S. each year.

Unfortunately, Rivian has not kept up with investor expectations and the stock price dropped below the IPO price. Rivian needs to prove that it can handle mass production, yet the production ramp has disappointed. The startup was unable to meet its 2021 goal of 1,200 truck deliveries, delivering 1,015 cars instead. After that, Rivian halved its 2022 production outlook to only 25,000 vehicles due to supply chain issues. As of March, the company had 83,000 in pre-orders but has only produced 1,410 cars.

Besides, Amazon, one of Rivian’s early backers, said it would buy electric delivery vans from Stellantis. Amazon’s 2019 promise to buy 100,000 vans from Rivian was one of the selling points of the IPO.

2. Lucid Group (LCID)

  • Market capitalization: $42 billion
  • 2022 return: -37%

Luxury electric car maker Lucid Motors went public in mid-2021. Since then, MotorTrend named the luxury sedan Lucid Air its car of the year, and the company started delivering vehicles. Lucid Air’s range exceeds 450 miles – pretty impressive for an EV. The Dream Edition can go as far as 520 miles on a single charge.

Production at Lucid’s manufacturing plant in Casa Grande, Arizona, started in September 2021, with the first cars shipping in October. However, production hasn’t been ramping fast enough. The company expects to ship 12,000-14,000 cars in 2022, less than what the analysts expected. Customer reservations stand at about 25,000.

Does the company justify its $40+ billion valuation? It depends on how quickly production ramps up. The company is expanding its manufacturing facility in Casa Grande to increase production capacity from 34,000 to 90,000 vehicles annually. And it even plans to expand to Canada, Europe, and China.

3. Fisker Inc (FSR)

  • Market capitalization: $3.6 billion
  • 2022 return: -25%

Fisker’s goal is to sell affordable, mass-market electric cars using an asset-light, direct-to-consumer business model. To make the cars, Fisker will use its partners’ infrastructure and IP. Partners include established contract manufacturers like Magna International and Foxconn. As a result, Fisker needs to invest less to produce the cars than vertically integrated companies like Lucid or Rivian.

Fisker, which went public on the New York Stock Exchange in late 2020, should launch its first model, Fisker Ocean, in Q4 2022. Fisker Ocean is a mid-sized SUV with a suggested retail price between $37,499 and $69,900. The company reported 30,000 reservations for the Ocean in mid-Feb.

In February 2022, Fisker began taking orders for its second EV, the PEAR, which starts below $30,000. The PEAR should be on the roads in 2024.

Although execution will, as always, be key, Fisker is targeting 200,000-250,000 in annual sales across four models by 2025.

4. Ford Motor Company (F)

  • Market capitalization: $67 billion
  • 2022 return: -22%

Founded in 1903, Ford is a traditional automaker transforming itself into an EV powerhouse. Under new leadership, Ford has pledged to spend $30 billion on EVs through 2025, including $7 billion on three battery factories. They may spend another $10-20 billion converting existing facilities to EV production. Ford is also creating distinct EV and internal combustion engine (ICE) car divisions within the company, leading to rumors of a possible EV spin-off.

The company’s EV line-up now includes the Mustang Mach-E SUV, which will compete with Tesla Model Y, and the F-150 Lightning pickup truck, which will compete with Rivian’s R1T. The truck is already seeing strong customer demand with 200,000 reservations placed. Ford expects to produce 150,000 F-150s annually. Although the company no longer plans to develop an EV with Rivian, the stock has been rewarded for the 12% stake in Rivian, which went public in 2021.

No upstart, Ford generated over $136 billion in 2021 sales from gasoline-powered cars. And some investors are betting that it may be easier for a car-maker with over 100 years of experience to transition to EVs than for a startup launched over the past five years to start making a lot of cars.

5. General Motors (GM)

  • Market capitalization: $63 billion
  • 2022 return: -27%

Another established car-maker, General Motors has pledged to invest $35 billion in electric and autonomous cars through 2025. The company plans to launch 30 new EVs by 2025, dedicating two Tennessee assembly plants to EV production. They’ve also promised to invest $7 billion in four Michigan plants that will focus on making EVs and EV batteries.

GM has already unveiled the electric version of Chevrolet Silverado, its best-selling truck. (GM sold over half a million regular Chevy Silverados in 2021.) The electric Silverado has a range of 400 miles per charge and costs around $40,000. The EV can even power a home, and it’s due on the roads in 2023.

In the meantime, GM is a profitable company with over $127 billion in revenue that clearly knows how to make a lot of cars.

6. NIO (NIO)

  • Market capitalization: $33 billion
  • 2022 return: -37%

China is the largest market for electric cars, and if you want to invest in EVs, you should consider Chinese EV makers like NIO. “The Tesla of China,” NIO is the pioneer in the premium EV market. It was founded in 2014 and backed by Tencent Holdings. Although NIO is based in Shanghai, the company has an ADR listed on the New York Stock Exchange, making it easy for U.S. investors to access.

Unlike the EV stocks that have yet to deliver, NIO delivered 91,429 vehicles in 2021, including 10,489 in December alone, a nearly 50% annual increase.

Despite being known for SUVs, NIO has just launched the ET5, a mid-size electric sedan, which is expected to challenge Tesla’s best-selling Model 3. Deliveries are expected in September 2022. The company is also expanding into Europe, starting with Norway, the country with the highest EV penetration in the world.

However, Chinese stocks have struggled due to fears about delisting from U.S. markets due to regulation. In the U.S., the SEC has created delisting risks for Chinese companies that don’t meet accounting standards.

7. Li Auto Inc (LI)

  • Market capitalization: $28 billion
  • 2022 return: -16%

Nasdaq-listed Li Auto is the largest electric SUV maker in China, focused on the mid to high-end market. Li Auto’s first model, Li ONE, is a six-seat large premium electric SUV that was released in May 2021.

The company delivered 90,491 vehicles in 2021, including more than 14,000 in December, a 130% increase. Going forward, Li Auto plans to extend its product line with new types of vehicles, expanding its addressable market.

Li Auto was founded in 2015 and backed by TikTok owner Bytedance and the e-commerce group Meituan Dianping.

8. Xpeng (XPEV)

  • Market capitalization: $24 billion
  • 2022 return: -43%

Alibaba-backed Xpeng is a Chinese EV maker with an ADR listed in the U.S., making it easy to invest.

Founded in 2015, the company produces a smart electric SUV (the G3) and a sedan (the P7), targeting the mid to high-end passenger car market. Like Tesla, Xpeng has pitched its smart features, such as autonomous driving and voice assistants.

In 2021, Xpeng delivered 98,155 EVs, a 263% increase year-over-year. The car-maker has also unveiled a new SUV, the G9, which it plans to launch in China in the third quarter of 2022. Besides, Xpeng is also planning to expand its European presence in 2022, having already started with Norway.

9. BYD (BYDDF)

  • Market capitalization: $99 billion
  • 2022 return: -21%

Warren Buffet-backed BYD is more than an EV manufacturer. Founded in 1995 in Shenzhen, China, BYD began as a rechargeable battery maker for mobile phones. Today, it’s also a major EV battery supplier. Besides electric cars, BYD makes battery-powered buses, trucks, forklifts, and a monorail system. The company posted strong 2021 EV deliveries and shipped 603,783 passenger and commercial vehicles overall (including ICE vehicles). The company is also selling EVs in Norway and plans to expand to other European and global markets.

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10. Faraday Future Intelligent Electric Inc (FFIE)

  • Market capitalization: $1.7 billion
  • 2022 return: -15%

The Nasdaq-listed EV startup Faraday Future is certainly risky, but it is going after two big markets, the U.S. and China, the largest EV market in the world. Founded in 2014 and headquartered in Los Angeles, California, the startup wants to make very high-end EVs at its facility in Hanford, California, and through a partner in South Korea.

11. Nikola (NKLA)

  • Market capitalization: $3.8 billion
  • 2022 return: -11%

Electric truck startup Nikola has had its fair share of troubles in 2020-2021, will 2022 be better? Following a lot of hype about “the Tesla of trucks,” shares crashed from $90 a share to under $10 after a short-seller accused the company and its founder, Trevor Milton, of misleading investors. Since then, Trevor Milton has left, and in December 2021, the company agreed to pay $125 million in an SEC settlement. Also in December 2021, Nikola delivered its first EV truck, and shares surged. Perhaps it’s time to give Nikola another chance.

EV ETFs

What if you don’t want to pick individual stocks? You can still invest in Tesla competitors through several ETFs like the iShares Self-Driving EV and Tech ETF (IDRV). Read our review of EV ETFs.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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