While electric vehicles (EV) have been around for a while now, the industry continues to see strong growth. In March, for example, 86,120 new electric cars were registered in the UK – an increase of 24% year on year.
But what are the best EV stocks to buy as an investment? And are shares in Ferrari – which has recently launched its own EV (the Luca) – worth a look as an electric vehicle play?
Is Tesla the best EV stock?
It’s hard to discuss EV stocks and not mention Tesla (TSLA:NASDAQ). It was the first company to bring EVs mainstream and today it remains a market leader.
Now, Tesla’s growth has stalled in recent years. In 2025, for example, deliveries fell 9% year on year to 1.64 million vehicles.
However, many investors still see a lot of growth potential here in the long run. Looking ahead, Tesla’s Full Self-Driving (FSD) technology and its robotaxis could be major growth drivers.
One big-name investor who remains very bullish on TSLA is ARK portfolio manager Cathie Wood. Her long-term price target is $2,600, which is more than 500% above the current share price.
It’s worth noting that Tesla has a very high valuation today (its forward-looking P/E ratio is about 210) so it’s a high-risk stock. It could still be worth checking out, however, if one is looking for EV stocks to buy.
Tesla’s competition
An issue that Tesla is facing today is that it now has plenty of competition in the EV space. One major competitor is Rivian (RIVN:NASDAQ).
It makes several high-end EVs including a full-size pickup truck and some SUVs. And reviews are highly positive – Rivian consistently ranks at the top of the industry for owner satisfaction.
It’s worth pointing out that this company isn’t yet profitable. This adds risk for investors.
However, revenues are rising rapidly – this year analysts expect growth of around 30%. And the company’s price-to-sales ratio (4) is a lot lower than Tesla’s (16), so it could be worth a look as an investment.
Chinese EV stocks
Tesla is also facing competition from a number of Chinese companies today. BYD (BYDDY:OTC) is one company that’s capturing market share.
In 2025, it sold 2.3 million battery-electric vehicles globally, officially overtaking Tesla to become the world’s largest EV brand. This figure was up 27% year on year.
From an investment perspective, BYD has a few things going for it. For a start, it’s profitable.
Second, the valuation looks reasonable. Looking at earnings forecasts for 2026, the P/E ratio is only around 20.
Yet BYD isn’t the only Chinese EV stock worth a look. Another is XPeng (XPEV:NASDAQ).
It delivered around 430,000 EVs last year. That figure was up 126% year on year, so this company is growing quickly.
One attraction of this company is that it has big plans on the autonomous vehicle front. Here, it has developed the VLA 2.0 intelligent driving system – a next-generation Physical AI model trained on 100 million video clips.
Looking ahead, it plans to offer this technology to other auto makers (e.g. Volkswagen and Hyundai) so this could be a major growth driver. The company is not yet profitable though, so the risks from an investment perspective are high.
Is Ferrari a top EV stock?
As for Ferrari (RACE:NYSE), I’m not convinced that its new EV, the Ferrari Luce, is going to be a hit. It seems a lot of car enthusiasts aren’t happy with the design.
That said, Ferrari shares could still be worth considering as an investment. Because this company is a special business.
What sets Ferrari apart from other automakers is that it only makes a very small number of high-end cars every year (around 14,000). Believe it or not, Porsche makes more cars in a year than Ferrari has made in its entire history.
Meanwhile, its customers are very wealthy. Many are billionaires.
As a result of these dynamics, demand for Ferrari’s cars is always extremely high (it’s so high that waiting lists stretch out for years). This gives it far more pricing power than other car companies.
This pricing power is reflected in its operating profit margin and its return on capital employed. Here, the company leads the industry.
Now, Ferrari shares have experienced some weakness recently. After hitting $500 in 2025, they’ve fallen to $350.
At that price, I believe they’re worth considering as the P/E ratio is only about 30. There are risks around the transition to EVs, but overall, I like the risk/reward set-up.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
Before establishing himself as a writer, Edward earned a Commerce degree from the prestigious University of Melbourne. Complementing his academic background, he holds the esteemed Investment Management Certificate (IMC) and is a proud holder of the Chartered Financial Analyst (CFA) qualification.
Widely recognised as a sought-after investment expert, Edward’s insightful perspectives and analyses have been featured on sites such as BlackRock, Credit Suisse, WisdomTree, Motley Fool, eToro, and CMC Markets, among others.
