The electric vehicle market lost some juice earlier in 2024, but October showed a sector comeback with some serious battery power.
According to Cox Automotive, new EV sales were up 2.3% for the month and have cleared one million units for the year to date. Cox attributed the growth to aggressive dealer incentives and attractive vehicle leasing deals.
But that growth has yet to translate into success for sector portfolio players. A case in point is the benchmark Global X Autonomous & Electric Vehicles ETF (DRIV), which is losing ground, down -6.61% for the year.
That’s the trouble with EV stocks and funds, market mavens say. While the long-term glide path looks clear enough for electric vehicles, mile marker to mile marker, the sector isn’t gaining much steam.
Here’s why those troubles may continue in 2025 – with one huge potential exception.
“There is a lot of opportunity in the EV market, but it still faces significant challenges, mainly geared around consumer confusion,” says David Boice, CEO of Team Velocity, an automotive technologies firm in Washington, D.C. “The upsides are that EVs are changing how the government can incentivize vehicles, allowing OEMs to explore new tech, and cities are constantly expanding infrastructure for mass adoption and sustainability.”
The downsides, unfortunately, are stacking up right now.
“A lack of resources leaves consumers uncertain; tax credits, charging time, and long-term savings are all things Americans need to understand before buying an EV,” Boice says. “OEMs and dealers need to be providing clear messaging about their vehicles to make sure there is as little friction surrounding the EV purchasing process as possible.”
Another issue vexing potential investors is how the Trump administration’s EV policies will play out.
“The biggest downsides right now have to do with affordability,” says KC Boyce, vice president at Escalent, a global market research and data advisory firm. “If the EV purchase tax credit goes away under Trump 2.0 and automakers don’t continue a relentless pursuit of affordable models, EV adoption will run out of juice.”
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What the Experts Are Saying About EV Stocks
With that framework in mind, where are EV stocks headed in what promises to be a tumultuous 2025? Here’s a snapshot of what sector plays stand out and why.
Tesla (TSLA). Elon Musk’s favorite car company has seen its share price rise by 34% so far in 2024, comfortably ahead of the S&P 500 Index, which is up 26% for the year.
When it comes to investing, companies that show they’re in it for the long haul are almost always a good bet, and Tesla follows that script to the letter.
“Tesla is an obvious choice as an EV favorite — they’ve practically defined the electric vehicles category,” says Mark Whitley, founder and CEO at Whits Corporation, a sustainable technology firm in St. Louis, Mo.
Investors shouldn’t pay too much attention to the highly vocal Musk, but the Trump administration’s aggressive stance on tariffs and EV credits is another story. “Despite Elon Musk saying he wants Trump to kill EV tax credits, Tesla benefits greatly from the current regulatory regime,” Boyce says.
Chargeback (CHPT). This Campbell, Cal.-based electric vehicle charging network provider went public last March via a special purchase acquisition company (SPAC) deal and has plummeted over 90% since the rollout.
Yet the company operates 315,000 charging ports in the US and abroad, giving it a big advantage in a burgeoning industry. It also has over one million roaming charging points, which represents a robust number in another growing EV sector.
The company’s broad-based operational stance should eventually stabilize the stock price, but it also has other advantages.
“Let’s not forget the infrastructure part,” Whitley says. “Companies like ChargePoint, which focuses on electric vehicle charging solutions, are a way to invest in the sector without betting on any specific vehicle.”
BHP Group, LTD (BHP). This nickel mining company is a good supply/demand stock right now, as nickel is one EV-linked commodity company that can take advantage of rising EV battery needs.
The stock is down 24% for the year, but with production pressures pushing nickel demand up, BHP may make sense for sector investors over the long haul.
“There’s potential in businesses that develop EV infrastructure, like battery technology and charging networks,” says Dre Villeroy, CEO at Beyorch, a private equity firm in Los Angeles, Cal. “They are essential to expanding the sector.”
Going Forward
Ultimately, investors’ short-term sector issues against long-term potential will matter most, and lead them to choose sector stocks accordingly.
“I suspect EV sales will be very strong in December due to the prospect of the tax credit going away and may slow down for a bit as the ultimate resolution of the tax credit is under discussion in Washington,” Boyce says. “Over time, however, EVs will continue a growth trajectory.”
“Just how quick a growth trajectory really depends on where we land with the regulatory and tax environment in Washington,” he adds.
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