We recently published a list of 12 Best EV Stocks to Buy for The Long Term. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other best EV stocks to buy for the long term.

While there was a slowdown in the US battery electric vehicle (BEV) sales towards the end of 2024, S&P Global believes that long-term EV market trends remain optimistic. Sales forecasts expect a continued increase in BEV market share, with an evolution in consumer demand and infrastructure. In October 2024, the BEV market touched an 8.9% share of all retail registrations, demonstrating a YoY increase of only 0.6 percentage points.

S&P Global further added that through the first 10 months of 2024, BEV sales volume saw a strong growth of 12.6% from the previous year, registering 1,023,716 units.

Sales Trends in EV Sales

Rho Motion, the leading EV research house, announced that the number of EVs sold globally in January 2025 stood at 1.3 million. While it fell by over a third from December’s strong month, the global market saw an increase of 18% as compared to January 2024. Notably, the EU & EFTA & UK EV market kicked off 2025 up by 21% after selling more than 250,000 EV units in January 2025. To provide a brief context, EFTA means European Free Trade Association. It has 4 member states i.e., Iceland, Liechtenstein, Norway, and Switzerland.

The European market made a strong start and must continue this performance to meet the emission standards for 2025, otherwise manufacturers will witness fines. Rho Motion stated that most of the European markets increased YoY, including Germany where EV sales went up by over 40% YoY and BEV sales increased by over 50% YoY. Elsewhere, the US & Canada EV market kicked off 2025 with 22% growth in EV sales YoY, reaching 0.13 million units sold. Cox Automotive expects that 1 out of every 4 vehicles sold in 2025 is expected to be electrified, with EVs accounting for ~10% of the market total in the year ahead, showcasing an increase from ~7.5% in 2024.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Growth Drivers of the EV Market

Cox Automotive expects that EV growth will stem from ~15 additional EV models entering the market, consumers deciding to buy before policy changes, and state-level incentives countering the federal cuts. Also, the expansion of the EV charging network will contribute to this growth. The firm remains optimistic about retail automotive in 2025. Notably, the availability of vehicles, competitive incentives, and good news on auto loan rates can fuel healthy demand from capable buyers.

EV Magazine expects strong growth in EV market share in 2025, stemming from technological progress and supportive policies. Furthermore, automakers continue to expand their model offerings to address diverse consumer preferences, ranging from luxury SUVs to city-friendly compacts.

Our Methodology

To list the 12 Best EV Stocks to Buy for The Long Term, we sifted through several online rankings and chose the companies catering to the broader EV sector that have positive 3-year sales growth, which we sourced from SeekingAlpha. Next, we mentioned the hedge fund sentiments around each stock, as of Q3 2024. Finally, the stocks were arranged in the ascending order of their hedge fund sentiment.

At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 99

3-Year Sales Growth: 21.9%

Tesla, Inc. (NASDAQ:TSLA) is engaged in designing, developing, manufacturing, leasing, and selling EVs, and energy generation and storage systems. The company’s strong brand equity helps command premium pricing, while the company’s EV manufacturing expertise enables it to make vehicles more cheaply than competitors. Morningstar expects increased autonomous driving software adoption and rapid growth in Tesla, Inc. (NASDAQ:TSLA)’s energy generation and storage business.

With continuous advancements in vehicle autonomy and the introduction of new products, the company expects the vehicle business to return to growth in 2025. The rate of growth is expected to rely on several factors, including the rate of acceleration of its autonomy efforts, production ramp at the factories, and the broader macroeconomic environment. However, Tesla, Inc. (NASDAQ:TSLA) anticipates energy storage deployments to grow at least 50% YoY in 2025.

Morningstar sees the potential for Tesla, Inc. (NASDAQ:TSLA) to outearn its cost of capital over at least the upcoming 20 years. Benchmark analyst Mickey Legg initiated coverage of the company’s shares and provided a “Buy” rating with a price target of $475. Apart from the continued proliferation of the EV market, Tesla, Inc. (NASDAQ:TSLA) possesses several opportunities to fuel growth, including AVs, robotics, and energy generation/storage, says the analyst.

Overall, TSLA ranks 1st on our list of best EV stocks to buy for the long term. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.