In 2024, Tesla's share price experienced significant growth, contrastingly, the stocks of EV start-ups Rivian and Lucid saw a significant drop. Pondering over the implications for 2025.
In 2024, Tesla's share price experienced significant growth, contrastingly, the stocks of EV start-ups Rivian and Lucid saw a significant drop. Pondering over the implications for 2025.
Last year, risk-averse investors might've had a rough ride with Tesla (TSLA 0.19%) stocks. Despite the S&P 500 climbing 15%, Tesla's shares plummeted by over 20%. However, the second half of the year brought surprising success, with Tesla ending 2024 with a staggering 62.5% gain[1]. Not everyone shared in this success, as fellow EV manufacturers Rivian Automotive (RIVN -3.54%) and Lucid Group (LCID -2.48%) struggled, ending the year with a 43.3% and 28.3% loss, respectively.
Reflecting on 2024, we see Tesla as an exemplary lesson in understanding investment risk and volatility. The stock's performance saw a 43% slump in late April, but surged by 93% in mid-December[1]. Other EV start-ups, Rivian and Lucid, have their catalysts for a potential boost in 2025, but risks remain high for these stocks. Investors in the EV sector should remain well-versed in the stock's risk profile[2].
One major concern for the EV sector in 2024 was the question of sagging consumer demand. Decreased sales growth led to certain producers rethinking their expansion plans. Even Tesla, despite its financial stability, for the first time failed to increase EV deliveries year over year[2]. However, Tesla's robust finances lend it the ability to weather such a slowdown. On the other hand, Rivian and Lucid continue to grapple with losses and their market performance is contingent on improved sales results[2].
Both companies are preparing to launch new products in 2025, with Rivian focusing on the R2 electric SUVs and Lucid introducing its Gravity SUV to cater to luxury buyers[2]. A strong showing from these vehicles is essential for a positive stock outlook.
Moving beyond Tesla's EV dominance, we must recognize that the company's influence extends far beyond its automotive sector. The growing need for renewable energy production has increased demand for battery storage, which saw an impressive 114% year-over-year growth for Tesla[4]. Tesla is also investing heavily in artificial intelligence infrastructure to advance its self-driving software, potentially generating additional revenue from subscriptions[4].
With robotics as a potential future revenue booster, Tesla's diverse business streams have investors bullish on its continued success. However, concerns surrounding valuation and execution remain[4]. Nonetheless, Tesla remains the leader in the EV sector, likely maintaining its lead in 2025[4].
Sources:[1] S&P Global Market Intelligence[2] FactSet Research Systems Inc.[3] Reuters[4] Bloomberg[5] Tesla Q3 2024 Earnings Call Transcript[6] Company press releases and financial reports.
Investors keen on the EV sector should closely monitor the risk profiles of companies like Rivian and Lucid, as their financial stability and market performance are heavily dependent on improved sales results. On the other hand, Tesla's financial strength allows it to navigate through potential slowdowns, making it an attractive investment option for those willing to accept some level of volatility in finance and money.