The narrative around electric vehicle (EV) stocks in 2024 was a bit misleading. If you didn't dig into the numbers, you might have assumed that EV sales in the U.S. were declining, but that simply wasn't the case. The U.S. EV industry grew its sales, just perhaps not at the fast pace automakers and investors had hoped for.
The gloomy narrative, however incorrect, seemed to weigh on some EV stocks throughout the year. But BYD (OTC: BYDDY), General Motors(NYSE: GM), and Tesla(NASDAQ: TSLA), bucked the trend and probably aren't slowing down anytime soon.
A Chinese juggernaut
Let's take a quick look at how much distance BYD, GM, and Tesla, put between themselves and the competition in terms of stock price during 2024.
Start with BYD, since its gains were the most conventional, with higher sales driving shares upward. The company sold nearly 4.3 million vehicles globally in 2024, up significantly from the prior year's 3 million. After topping Volkswagen to earn the title of China's largest carmaker in 2023, BYD had a breakout year in 2024 and achieved a few intriguing feats.
One such feat included outselling Japanese juggernaut Toyota with EVs on the latter's home turf of Japan during 2024. It's a fairly big deal since BYD didn't launch its first EV in Japan until early 2023, and it quickly gained ground thanks to its more affordable starting price around $30,000 for its Atto 3 SUV.
It's not likely to get any easier for Toyota, either, since BYD has launched several high-volume models, including the Dolphin, which starts at roughly $19,000. Those price points are incredibly difficult for automakers outside of China to compete with.
But BYD isn't stopping there. While the company continues to take over its home China market, it is entering markets globally. Steeper tariffs in Europe and the U.S. might slow the Chinese giant down temporarily, but BYD isn't going anywhere and is likely to continue expanding rapidly.
The king of Detroit?
Ford and Stellantis had their own problems in 2024. The former's higher warranty costs weighed on earnings. And Stellantis is essentially planning a full turnaround in 2025 after former CEO Carlos Tavares abruptly resigned late last year.
General Motors, on the other hand, thrived. Not only did it top Wall Street estimates and raise guidance multiple times in 2024, but it also made progress in multiple areas, including EVs.
Data source: GM's Q4 presentation. Chart source: Author.
GM consistently improved its sales total and U.S. market share throughout 2024, becoming the No. 2 seller of EVs in the U.S. for the second half of the year. The automaker also expanded its vehicle lineup to cover important segments and price points, enabling it to become more competitive globally.
In fact, thanks to GM's restructuring in China as well as a focus on its lineup's competitiveness, the automaker returned its operations there to an adjusted profit during the fourth quarter – a challenging feat for foreign autos amid a brutal price war in the region.
Another big win came when GM announced its EV portfolio was variable profit positive in the fourth quarter – a measure that includes emissions credits and advanced manufacturing tax credits – which was a strong 35% improvement compared to the prior year.
However, perhaps its biggest move to drive its share price higher was the repurchasing of $16 billion worth of shares over the past couple of years, which drove its number of outstanding shares significantly lower. The size of the move was massive for a company with a market capitalization of $50 billion.
The future is ... soon
Tesla had a solid year despite a growing narrative that the groundbreaking EV maker has an aging lineup and a distracted CEO, and the company recorded its first global sales decline in its history. Tesla's stock price gains in 2024 are a little more unconventional in that sense, because investors seem to be jumping on to buy into the future.
A slight sales decline didn't ruffle Tesla investors' feathers last year, and many began focusing on the company's artificial intelligence (AI) and self-driving ambitions. In fact, on Jan. 29, Tesla said it would launch its long-promised commercial robotaxi service in June. The ambitious strategy will start in Austin, Texas, before expanding the network across the U.S. market, and then the globe.
Investors are buying into the notion that at some point in the future, Tesla's fleet of robotaxis will become the largest in the world and generate more revenue than vehicle sales. Elon Musk has even predicted that the automaker could make as many as 100 million humanoid robots within a few years -- the Optimus robots already use a version of Tesla's self-driving software.
Tesla has overpromised and underdelivered before, but investors seem willing to accept the risk for such lucrative long-term potential.
What it all means
Right now, if you're intrigued by the blossoming global EV industry, as it continues to eat up market share from internal combustion engines, it's hit or miss. BYD, GM, and Tesla separated themselves from the rest for varying reasons, while many young start-up EV makers struggled with heavy cash burn.
All three automakers have momentum heading into 2025. BYD is slowly expanding its Chinese EV empire across the globe. Tesla is preparing for a distant but potentially lucrative future. And GM focused on its core business and buying back shares at a paltry price-to-earnings ratio.
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Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company, General Motors, Stellantis, and Volkswagen Ag. The Motley Fool has a disclosure policy.
