1 No-Brainer Electric Vehicle (EV) Stock to Buy for $200 Right Now

It wasn’t that long ago that nearly every electric vehicle (EV) stock rose in value. In 2021, for example, industry hype was at a fever pitch. Several EV companies — including Rivian Automotive and The Lucid Group — debuted on public markets to much fanfare as mainstream automakers boasted plans to aggressively expand their electric vehicle lineups.

A lot has changed since then. And after a steep industry selloff, it’s time to go bargain shopping. One flagship EV stock in particular should grab your attention right now.

Is this famous EV stock finally a bargain?

adze (TSLA -2.33%)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 electric vehicles could be beautiful, reliable and downright fun.

Meanwhile, its billion-dollar charging network investments boosted global demand for a vehicle category that, at least at the time, still had a higher total cost of ownership than conventional internal combustion alternatives.

Tesla’s early-transition advantage has given it a strong foothold in an industry that has invested little structurally in its electric vehicle lines. It had the staff, capital, fan base and manufacturing capabilities to ramp up production quickly, just as demand for electric vehicles began to take off. From 2018 to 2022, for example, sales increased by 357%.

But then a curious thing happened. Sales of electric vehicles in the US continued to grow, but more slowly than expected. This has hugely affected the premium valuations the market has previously assigned to EV stocks.

From 2022 to 2024, for example, Tesla’s valuation fell from nearly 30 times sales to less than 10 times sales — a two-thirds cut in 24 months. Other EV makers such as Rivian and Lucid have seen similar valuation declines.

More recently, Tesla’s revenue base has not only flattened, but declined in certain quarters. To be fair, the stock is still relatively expensive at 8.4 times sales. But if you’ve been waiting to buy this flagship EV stock, this could be your chance. One statistic in particular should get you excited.

TSLA Revenue (TTM) data from YCharts; TTM = last 12 months; PS = sales price.

Tesla is still the king of electric vehicles

While Tesla is involved in other businesses, including solar power and battery storage, more than 90% of its revenue base is still tied to its automotive segment. His future will be made or broken based on the success of this business, and most of his valuation is tied to its fate.

It’s important to note that it still holds a dominant share of the US EV market. Various estimates peg it at 50% to 80% market share.

And demand for electric vehicles continues to grow, despite downgrading forecasts. Over the next five years, domestic electric vehicle sales are now expected to grow by more than 10% annually, with industry revenues for US electric vehicles to exceed $150 billion by 2029.

Globally, electric vehicle sales are expected to exceed $1 trillion by 2029. That’s good news considering Tesla has an estimated 39.4% market share globally, higher than the next eight contestants together.

Simply put, the EV market is still Tesla’s to lose. It has more capital, more brand recognition and more manufacturing capacity than any other competitor. And right now, several mainstream automakers are pulling back on their electric vehicle plans, potentially allowing the company to maintain its dominant position in the industry for years to come.

We may look back at 2024 as a clear outlier in Tesla’s long-term growth trajectory. Sales are expected to fall 8.2% this year. But in 2025, analysts expect a rebound, with revenues growing by 15.8%.

Is the stock still expensive at 8.4x sales? Absolute. But its long-term promise remains intact, and the current valuation is a relative bargain compared to years past.

If you believe in EVs for the long term, it’s hard not to bet on the current industry leader, even if there are some short-term challenges down the road. It would be a speculative bet, but investors who have been watching Tesla for years while waiting for a pullback should consider a small investment. If the stock continues to decline, it could be a prime opportunity for a dollar cost average.