We recently published a list of 12 Best EV Stocks to Buy for The Long Term. In this article, we are going to take a look at where Stellantis N.V. (NYSE:STLA) stands against other best EV stocks to buy for the long term.
While there was a slowdown in the US battery electric vehicle (BEV) sales towards the end of 2024, S&P Global believes that long-term EV market trends remain optimistic. Sales forecasts expect a continued increase in BEV market share, with an evolution in consumer demand and infrastructure. In October 2024, the BEV market touched an 8.9% share of all retail registrations, demonstrating a YoY increase of only 0.6 percentage points.
S&P Global further added that through the first 10 months of 2024, BEV sales volume saw a strong growth of 12.6% from the previous year, registering 1,023,716 units.
Sales Trends in EV Sales
Rho Motion, the leading EV research house, announced that the number of EVs sold globally in January 2025 stood at 1.3 million. While it fell by over a third from December’s strong month, the global market saw an increase of 18% as compared to January 2024. Notably, the EU & EFTA & UK EV market kicked off 2025 up by 21% after selling more than 250,000 EV units in January 2025. To provide a brief context, EFTA means European Free Trade Association. It has 4 member states i.e., Iceland, Liechtenstein, Norway, and Switzerland.
The European market made a strong start and must continue this performance to meet the emission standards for 2025, otherwise manufacturers will witness fines. Rho Motion stated that most of the European markets increased YoY, including Germany where EV sales went up by over 40% YoY and BEV sales increased by over 50% YoY. Elsewhere, the US & Canada EV market kicked off 2025 with 22% growth in EV sales YoY, reaching 0.13 million units sold. Cox Automotive expects that 1 out of every 4 vehicles sold in 2025 is expected to be electrified, with EVs accounting for ~10% of the market total in the year ahead, showcasing an increase from ~7.5% in 2024.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Growth Drivers of the EV Market
Cox Automotive expects that EV growth will stem from ~15 additional EV models entering the market, consumers deciding to buy before policy changes, and state-level incentives countering the federal cuts. Also, the expansion of the EV charging network will contribute to this growth. The firm remains optimistic about retail automotive in 2025. Notably, the availability of vehicles, competitive incentives, and good news on auto loan rates can fuel healthy demand from capable buyers.
EV Magazine expects strong growth in EV market share in 2025, stemming from technological progress and supportive policies. Furthermore, automakers continue to expand their model offerings to address diverse consumer preferences, ranging from luxury SUVs to city-friendly compacts.
Our Methodology
To list the 12 Best EV Stocks to Buy for The Long Term, we sifted through several online rankings and chose the companies catering to the broader EV sector that have positive 3-year sales growth, which we sourced from SeekingAlpha. Next, we mentioned the hedge fund sentiments around each stock, as of Q3 2024. Finally, the stocks were arranged in the ascending order of their hedge fund sentiment.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up view of a modern automobile with its sleek curves and luxurious body.
Stellantis N.V. (NYSE:STLA)
Number of Hedge Fund Holders: 24
3-Year Sales Growth: 20.5%
Stellantis N.V. (NYSE:STLA) is engaged in the design, engineering, manufacturing, distribution, and sale of automobiles and light commercial vehicles, engines, transmission systems, metallurgical products, mobility services, and production systems. Michael Jacks from Bank of America Securities reiterated a “Buy” rating on the company’s shares due to Stellantis N.V. (NYSE:STLA)’s strategic focus on establishing a strong recovery by 2025, despite a tough 2024. The analyst believes that the company has made strong progress in inventory management and by adjusting launch schedules for new models.
Furthermore, the expected recovery in adjusted operating income margins and the strategic launches in key markets like the European B-segment and the US muscle car market can fuel growth, opines Jacks. Stellantis N.V. (NYSE:STLA)’s unique approach to the Chinese market via its JV with Leapmotor can provide significant competitive advantages. By partnering with a rising Chinese EV brand, it gains access to the country’s advanced EV and battery production capabilities without the full risks related to direct market participation.
Ariel Investments, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“Lastly, shares of multinational automotive manufacturing company, Stellantis N.V. (NYSE:STLA) declined following a significant earnings miss. The company attributed the performance to lower sales, production disruptions from a product overhaul and weak performance in North America. Muted demand for electric vehicles in Europe also weighed on performance. In response, STLA is implementing operational improvement initiatives to bring down U.S. inventory levels through production cuts, consumer incentives and gradual price adjustments. Despite these results, management maintained its previous buyback and dividend commitments. Although we expect discounting to increase as U.S. inventory ages, we maintain a constructive view on the company. We believe STLA’s strong global footprint and commitment to industry leading profitability, operational excellence, and strategic foresight will continue to enhance long-term shareholder value.”
Overall, STLA ranks 6th on our list of best EV stocks to buy for the long term. While we acknowledge the potential of STLA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than STLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
