It wasn’t long ago that nearly every electric vehicle (EV) stock was soaring in value. In 2021, for example, industry hype was at a fever pitch. Several EV companies — including Rivian Automotive and Lucid Group — debuted on the public markets with great fanfare, while conventional automakers were boasting about plans to aggressively expand their EV lineups.
A lot has changed since then. And after a steep industry sell-off, it’s time to go bargain shopping. One iconic EV stock in particular should be capturing your attention right now.
Is this famous EV stock finally a bargain?
Tesla (NASDAQ: TSLA), the automaker led by the controversial Elon Musk, took the market by storm a decade ago. It’s taken for granted by some today, but it had to prove to a skeptical consumer base that EVs could be beautiful, reliable, and downright fun.
Its multibillion-dollar investments into its charging network, meanwhile, spurred global demand for a vehicle category that, at least at the time, still had a higher total ownership cost than conventional internal-combustion alternatives.
Tesla’s early mover advantage gave it a strong foothold in an industry that had structurally underinvested in its EV lineups. It had the personnel, capital, fan base, and manufacturing capabilities to scale up production rapidly just as EV demand started to take off. From 2018 to 2022, for instance, sales grew by an astounding 357%.
But then a curious thing happened. EV sales in the U.S. continued to climb, but slower than expected. This put a huge dent in the premium valuations the market had formerly assigned to EV stocks.
From 2022 to 2024, for example, Tesla’s valuation fell from nearly 30 times sales to under 10 times sales — a two-thirds reduction over 24 months. Other EV makers like Rivian and Lucid saw similar valuation declines.
More recently, Tesla’s revenue base has not only flattened, but has also declined in certain quarters. To be fair, the stock is still relatively expensive at 8.4 times sales. But if you have been waiting to buy into this iconic EV stock, this could be your chance. One…
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