3 Electric Vehicle Stocks That Could Be the Next Tesla

These companies are likely to expand within the EV market

• These EV stocks can be massive value creators if investors hold until 2030
• Li Auto (LI): Stellar growth that’s backed by launch of new models and aggressive retail expansion in China
• Rivian (RIVN): Cash burn is a concern, but the growth outlook remains strong in big markets of U.S. and Europe
• XPeng (XPEV): An innovator with aggressive expansion plans for Europe, which is likely to yield positive results
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Tesla (NASDAQ:TSLA) initial public offering happened in June 2010. The offer price was $17 per share and TSLA stock closed the first trading day at $23.9.

Adjusted for splits, TSLA stock is higher by 158x from the first day closing price. Indeed, the electric vehicle stock has been a massive value creator.

Even today, it’s among the top EV stocks to buy and hold.

But I must remind investors that Tesla’s journey towards value creation was not smooth. Continued cash burn was a big concern and I remember reading analysts reports writing off TSLA stock as a destroyer of value. Coming to the present, I believe that there can be multiple EV stocks that can try and replicate the performance of Tesla.

My view is underscored by the fact that the EV industry is still at an early stage of adoption. If things continue to move in the right direction, there is ample scope for growth for promising EV companies in the next 10 to 15 years.

This column discusses three EV stocks that can be the next Tesla in terms of growth and shareholder value creation.

Li Auto (LI)

Li Auto (NASDAQ:LI) has emerged as one of the most promising EV stocks from China. Year-to-date, LI stock has surged by 60% and the rally has been backed by strong business developments. The recent correction from highs is a good opportunity to accumulate. In my view, LI stock is worth holding until 2030 for multibag returns.

An important point to note is that even with challenging macroeconomic conditions, Li Auto has reported stellar growth.

For Q3 2023, deliveries surged by 296.3% on a year-on-year basis. This growth has been due to the launch of new models coupled with an aggressive retail expansion within China. Of course, the growth trajectory also clearly indicates that the EVs have been well accepted by consumers.

I like the fact that Li Auto continues to focus on China. Even with $10.17 billion in cash buffer, the company has stayed away from global expansion, which might result in cost escalations. Further, macroeconomic conditions are not the best to invest in new markets.

With LI MEGA due for launch in December, it’s likely that growth in China will remain well above the industry average.