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 Toyota Motor Corporation (NYSE:TM) 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.
Workers assembling a car in a modern manufacturing plant, emphasizing the company’s sense of progress.
Toyota Motor Corporation (NYSE:TM)
For many people, Toyota (TM) isn’t the first name that comes to mind when talking about electric vehicles. The company manufactures several electric-only and hybrid models, including hybrid versions of the popular Corolla and Yaris models, as well as the electric bZ4X. As a legacy automaker, the company focuses primarily on delivering high-quality powertrains and providing consumers with increased digital innovations in their line-ups.
The FY2025 semi-annual report shows mixed results. Sales revenue totaled $147.6 million (JPY 23.28 billion), an increase of 5.9% compared to the same period of 2024. North America and Europe were largely responsible for the increased sales performance; however, Toyota reported a decrease in parts of Asia, including Japan.
On the other hand, total operating income of $15.60 billion (JPY 2.46 billion) decreased by 3.7% due to higher operational costs and material costs. Despite the not-so-impressive numbers, Toyota’s position in the EV segment is cemented in its approach to growing the number of options, which is evident from the announced models for 2025.
Fundamental delivery shows that there is long-term potential for the Toyota Group. Shares of the company have remained largely undervalued by an average of 19%, according to one analysis. Despite this, the company holds a modestly positive balance sheet, but there is still room for improvement.
In the last couple of years, EBITDA delivery has been making steady progress. In 2023, the company reported EBITDA of $33.12 billion, a decline of 16.3% the year before. However, in 2024, conditions improved, with an EBITDA of $46.42 billion, and posting a 40.1% increase. Return on capital remains on the lower end at 3.92% for the period ending September 30.
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 TM ranks 2nd on our list of the best EV stocks to buy. While we acknowledge the potential of TM 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 TM 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.