Robert Way
With a market capitalization of approximately $568B, Tesla is valued higher than the top five publicly traded U.S. automakers – Toyota (TM) , BYD (OTCPK:BYDDF) , Stellantis (STLA) , General Motors (GM) and Ford (F) )—Incorporation.
In comparison, BYD is arguably the world’s largest seller of electric vehicles. The market value is only about $88B. Meanwhile, the Big Three — Stellantis, General Motors, and Ford — are valued at $67B, $51B, and $48B respectively. Even though Toyota has an impressive market capitalization of $293B, it still lags far behind Tesla.
Dropping down to the next tier of EV makers, Li Auto (LI) has a market cap of ~$20B, followed by NIO (NIO), Rivian (RIVN), Xpeng (XPEV), and Lucid (LCID), all according to Yahoo Financial data, worth between $7B and $11B.
Which leads us to today’s EV investor question: Which electric vehicle stocks are currently undervalued?
We asked Seeking Alpha analysts Victor Dergunov, Jonathan Weber and Bill Maurer to weigh in on this topic.
Victor Delgunov: It’s a good question to ask about which EV stocks are undervalued right now. The industry is going through a tough time due to slowing growth, high interest rates and other temporary challenges. As a result, we’ve seen many EV-related stocks fall in value recently. However, I will stick with my usual skepticism that Tesla (NASDAQ: Tesla), the first choice in the electric vehicle industry, is undervalued relative to its long-term growth and profitability prospects. On a more speculative note, I like NIO from China as a possible high-end EV competitor to Tesla. If you want to talk about being undervalued, we have to look beyond electric vehicles and lithium mining, with stocks like Albemarle (ALB), Arcadia Lithium (ALTM) and others being significantly undervalued relative to their long-term prospects.
Jonathan Webb: I think BYD is undervalued, and Rivian (RIVN) is also an undervalued electric vehicle company. Although BYD’s growth rate is attractive, its price-to-earnings ratio is still below 20, which represents the best value proposition in the electric vehicle space. For those who don’t want to invest in China, Rivian’s forward EV-to-sales multiple of just 1.4 is also a potential option, although there is the risk that Rivian is not yet profitable.
Bill Maurer: I’d say the two most undervalued names are BYD (OTCPK: BYDDY ) (OTCPK: BYDDF ) and General Motors (GM) . BYD, China’s undisputed EV leader and currently leveraging its vertical integration and production facilities to become a global giant, trades at only about 0.6 times its projected 2025 sales. A top value pick because it looks to have the best overall EV lineup heading into 2025 while trading at about 0.3x sales and has huge free cash flow that is currently being used primarily for stock repurchases.
