TSLA, LI, or RIVN: Which EV Stock Could Deliver the Highest Upside Potential?
Several electric vehicle (EV) makers have been under pressure due to intense competition, macro uncertainties, and concerns over the potential elimination of EV tax credits under President-elect Donald Trump’s administration. However, the long-term road for EVs looks attractive, given the growing focus on climate change. Using TipRanks’ Stock Comparison Tool , we placed Tesla (TSLA), Li Auto (LI), and Rivian (RIVN) against each other to find the EV stock with the highest upside potential, according to analysts.
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Tesla (NASDAQ:TSLA)
Shares of Tesla (TSLA) have rallied 77% year-to-date, driven by the optimism surrounding CEO Elon Musk’s close ties with President-elect Donald Trump , the possibility of favorable regulations under the new administration as well as the prospects of the company’s full self-driving (FSD) technology and robotaxis, also known as the Cybercab.
However, in contrast to the market optimism, most analysts remain on the sidelines on TSLA stock due to concerns over the impact of rising competition and aggressive price cuts on Tesla’s sales and profitability and the lack of innovation.
After Tesla’s better-than-expected third-quarter performance , all eyes are on the company’s Q4 results. Currently, analysts expect the company’s revenue to rise about 9% year-over-year to $27.4 billion and EPS (earnings per share) to increase by nearly 8% to $0.76 .
What Is the Price Target for Tesla Stock?
Truist Securities analyst William Stein raised the price target for Tesla stock to $360 from $238 while reiterating a Hold rating. The analyst is “incrementally cautious” following TSLA’s recent rally, which he believes has very little to do with the company’s Q3 results or outlook and is mostly linked to Musk’s ties with President-elect Trump.
Because of this vital relationship, the analyst is currently optimistic about TSLA’s various businesses generating positive cash flows. However, the analyst sees high risks as so much value is assigned to Tesla’s AI and other businesses that have no marketable product or cash flow as of now.
Overall, Wall Street is sidelined on Tesla stock, with a Hold consensus rating based on 13 Buys, 12 Holds, and nine Sells. The average TSLA stock price target of $293.76 implies 30.2% downside risk.
See more TSLA analyst ratings
Li Auto (NASDAQ:LI)
Chinese EV maker Li Auto has delivered resilient performance despite the macro uncertainty and stiff competition in China. The company’s Q3 revenue grew about 24% year-over-year to RMB 42.9 billion ($6.1 billion). Moreover, adjusted earnings per ADS (American Depositary Shares) increased to RMB 3.63 ($0.52) from RMB 3.29 per share in the prior-year quarter.
The company delivered 48,740 vehicles in November, reflecting an 18.8% year-over-year rise but a 5.25% decline compared to October deliveries. Despite this near-term setback, it is worth noting that Li Auto has higher vehicle margins than several peers and is also profitable compared to many loss-making Chinese EV makers.
Is LI Stock a Good Buy?
In a recent research note, analysts at Bernstein noted that while EV sales are under pressure in Western markets, with original equipment manufacturers looking to reduce production, EV companies in China seem “unperturbed,” with expectations of sequential expansion in targets. Analysts further said that following constrained capacity expansion for most of 2024, Chinese EV companies are now planning for additional growth.
Bernstein expects sales growth in China to be over 45% for 2024 and 20%-25% for 2025. Among the Chinese EV companies, Bernstein has a Buy rating on Li Auto and BYD (BYDDY).
With four Buys and four Holds, Li Auto stock has a Moderate Buy consensus rating. The average LI stock price target of $30.35 implies 29% upside potential.
See more LI analyst ratings
Rivian (NASDAQ:RIVN)
Rivian shares have advanced about 38% over the past month as investors reacted positively to the news of the company securing a loan of up to $6.6 billion from the Department of Energy (DoE) and the announcement of a partnership with Volkswagen (VWAGY).
However, RIVN shares are still down 41% year-to-date due to concerns over sluggish EV demand and the company’s Q3 results , which saw a lowering of the full-year adjusted EBITDA outlook. Rivian expects its 2024 adjusted EBITDA in the range of a loss of $2.83 billion to $2.88 billion compared to the prior loss estimate of $2.7 billion.
However, the company reassured that its core focus is on progressing toward profitability, with the aim of achieving a positive gross margin in the fourth quarter of 2024. The company has been facing supplier issues, which led to the slashing of the production target in October 2024 from 57,000 units to the range of 47,000 to 49,000 units.
Is Rivian a Buy, Sell, or Hold?
Recently, Baird analyst Ben Kallo reiterated a Buy rating on RIVN stock and lowered the price target to $16 from $18. While the analyst continues to be constructive about Rivian’s R2 platform and long-term margin targets, he believes that the company’s target of achieving gross margin profitability by late 2024 will be a key focus for investors.
With favorable developments like the Volkswagen partnership and the DoE funding behind us, the analyst remains on the sidelines on RIVN stock due to limited catalysts in 2025 and a challenging EV demand environment.
With 10 Buys, 10 Holds, and one Sell, Rivian scores a Moderate Buy consensus rating. The average RIVN stock price target of $15.05 implies about 9% upside potential.
See more RIVN analyst ratings
Conclusion
Amid the ongoing challenges in the EV space, Wall Street is cautiously optimistic about Li Auto and Rivian but sidelined on Tesla stock. Currently, analysts see the highest upside potential in Li Auto stock compared to Rivian and Tesla. Despite macro pressures and stiff competition, Li Auto has delivered a resilient performance so far this year, and its long-term prospects look attractive.
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