We recently compiled a list of the 5 Best EV Stocks for 2025. In this article, we are going to take a look at where BYD Company Limited (002594.SZ) stands against the other EV stocks.
The automotive industry is on a steady growth path, with the electric vehicle (EV) segment leading the charge. Growing momentum and technological advancements are there to adhere to consumer demands, alongside new government policies. As the industry moves towards a cleaner and sustainable future, it opens the door for investors to profit from it.
Around the end of 2024, the number of EVs sold globally was predicted to surpass 17 million, which is a significant jump from 13 million in 2023. Though the electric vehicle witnessed an increasing number of challenges last year, 2025 could bring new opportunities for the industry. Stepping into the new year could help revitalize investor sentiment for the EV market, and bolster investor confidence going forward.
A pristine electric vehicle parked in front of a modern Gothenburg skyline.
BYD Company Limited (002594.SZ)
Contrary to popular belief, BYD, which is short for Build Your Dreams, has been on the market for longer than most people think. With over 3 decades, it positioned itself as a leader in the EV segment. To put that into perspective, in 2024, BYD managed to surpass Tesla (TSLA) in revenue numbers, something we haven’t seen from other brands. Strong global presence, and a surge in new vehicle deliveries could make BYD a leading competitor for Musk-owned Tesla.
The company’s Q3 report for 2024 shows just how much it has grown. BYD had a reported income of $1.58 billion (RMB 11.61 billion) , which is 11.47% more than the same quarter of 2023 and a 28.08% increase in Q2 2024. The reported revenue of $27.43 billion (RMB 201.12 billion) is an increase of 14.16% compared to Q2 and a 24.04% increase to Q3 2023.
BYD delivers an impressive balance sheet. Starting off with the return on capital which was 10.45% for the period ending September 30. Similarly, return on assets remained stable at 9,08% for the same reported period. Elsewhere, investors might have noticed the modest improvements in EBITDA, which rose 5.66% to $298.4 million in the last reporting quarter.
During Q3, the company sold over 1.13 million vehicles, which is a 15.02% increase over the previous quarter. Earnings Per Share (EPS) rose 6.72% in Q3 2023, and provides an attractive short-term investment return. However, limited dividend opportunities stand as one of BYD’s biggest drawbacks, but analysts are positive that the P/E ratio of 14.55 will present larger long-term returns.
Conclusion
As the EV market continues to expand at a fast pace, investing in EV stocks offers a unique opportunity for investors to capitalize. The transition towards sustainable transport, followed by the supporting industries, means that the EV segment is on a growth path. This is good news for investors looking to invest in this segment, and today’s five stocks can be an excellent option that can result in a solid profit.
Overall 002594.SZ ranks 1st on our list of the best EV stocks to buy. While we acknowledge the potential of 002594.SZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than 002594.SZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Disclosure: I have a tiny position in Tesla. No positions in any other stocks. This article is originally published at Insider Monkey.