Why REE Automotive (REE) Is Plunging in 2025?

We recently published a list of  Why These 15 Automotive Stocks Have Been Plunging In 2025. In this article, we are going to take a look at where REE Automotive Ltd. (NASDAQ:REE) stands against other automotive stocks that have been plunging in 2025.

Automotive stocks have been among the worst-performing names in the past few months, and even before that, if you exclude Tesla from the list. Donald Trump’s election caused panic among electric vehicle startups, and his tariff policies caused that panic and uncertainty to spread among traditional automakers.

Meanwhile, inflationary pressures and rising interest rates have dampened consumer demand for big-ticket purchases like vehicles. The recent inflation read is a step in the right direction and can eventually help bring rates lower, but the automotive sector is unlikely to pull off a big recovery anytime soon.

Methodology

For this article, I screened the worst-performing automotive stocks year-to-date.

I will also mention the number of hedge fund investors in these stocks. Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Why REE Automotive Ltd (REE) Is Plunging In 2025?

An assembly line of electric cars moving along a production line.

REE Automotive Ltd. (NASDAQ:REE)

Number of Hedge Fund Holders In Q4 2024: 5

REE Automotive Ltd. (NASDAQ:REE) makes modular electric vehicle platforms that feature its REECorner technology. It integrates vehicle systems into compact modules located near each wheel.

The stock is down significantly so far in 2025 as it has been taking hits from the broader market sentiment turning sour on automotive stocks, especially ones that are involved in EVs.

Also, REE Automotive (NASDAQ:REE) expects to start deliveries of scale-production vehicles in the first half of 2025, but there’s market uncertainty about their ability to meet these targets. Much like most EV startups, it is very capital-intensive.

The consensus price target of $14.5 implies 142.84% upside.

REE stock is down 31.71% year-to-date.

Overall, REE ranks 12th on our list of automotive stocks that have been plunging in 2025. While we acknowledge the potential of REE 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 time frame. If you are looking for an AI stock that is more promising than REE 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.