Where EV Stocks Are Going In 2025

The electric vehicle (EV) market faced some challenges earlier in 2024, but October saw a notable recovery fueled by impressive sales momentum.

According to data from Cox Automotive, new EV sales increased by 2.3% in October, bringing the total units sold this year to over one million.

However, this growth has not yet translated into gains for many investments in the sector. For instance, the benchmark Global X Autonomous & Electric Vehicles ETF (DRIV) has struggled, showing a decline of 6.61% for the year.

This inconsistency raises concerns among analysts. Long-term forecasts suggest a positive outlook for EVs, but the sector seems to be lacking immediate momentum.

Challenges Ahead for 2025

Industry experts point out several challenges that the EV market is facing, particularly regarding consumer clarity. David Boice, CEO of Team Velocity, highlights that while opportunities abound, there are significant hurdles related to consumer confusion.

"The upsides are that EVs are changing how the government supplies incentives and allowing original equipment manufacturers (OEMs) to innovate. Cities are also improving infrastructure, promoting sustainability and mass adoption of EVs," Boice stated.

Nonetheless, several concerns are mounting.

"Many consumers are uncertain due to issues like tax credits and charging times, as well as understanding long-term savings associated with EV ownership," Boice noted. "It's vital for OEMs and dealers to communicate clearly about their vehicles to reduce friction in the purchasing process.”

Another worry for potential investors is the possible impact of the Trump administration's policies on EVs.

KC Boyce, a vice president at Escalent, expressed concern: "Affordability is a significant issue. If EV purchase tax credits are eliminated under a potential Trump 2.0 administration, and automakers don't persistently focus on reducing prices, EV adoption might stall."

Expert Insights on EV Stocks

Given the current landscape, what does the future hold for EV stocks as we approach what could be a turbulent 2025? Here’s a look at some standout sector plays:

Tesla (TSLA): The frontrunner in the EV market, Tesla, has seen its stock price increase by 34% in 2024, outperforming the S&P 500 Index, which is up 26%.

"Tesla is a clear favorite for investors due to its strong long-term strategy and consistent market presence," said Mark Whitley, CEO of Whits Corporation.

Despite Elon Musk's controversial comments regarding EV tax credits, Tesla still significantly benefits from the current regulatory landscape.

ChargePoint (CHPT): This provider of electric vehicle charging networks has witnessed a drastic decline since going public last March via a SPAC deal. Its value has fallen over 90% since then.

Nevertheless, ChargePoint operates a network of 315,000 charging ports and has a significant number of roaming charging points worldwide, positioning it well in the expanding EV sector.

Whitley remarked, "Investing in infrastructure companies like ChargePoint allows investors to participate in the EV market without focusing solely on car manufacturers."

BHP Group, LTD (BHP): Known for nickel mining, BHP is currently a stock to watch as demand for nickel, a critical component in EV batteries, continues to rise. Despite being down 24% for the year, its potential for long-term growth is noteworthy.

Dre Villeroy, CEO of Beyorch, emphasized the importance of businesses involved in EV infrastructure, stating they are crucial for the sector's expansion.

Looking Ahead

In conclusion, while investors are grappling with short-term challenges, the long-term prospects for EV stocks remain promising. The dynamics influenced by regulatory and tax environments will play a pivotal role in determining the growth pace of the sector.

"We might see strong EV sales in December with concerns around the tax credit’s future, but a slowdown may follow as discussions about tax policies unfold in Washington," Boyce predicted. "However, over time, the steady growth of EVs should continue."

EV, stocks, 2025