Bram Berkowitz, The Motley Fool

Sun, May 25, 2025, 8:31 AM5 min read

• Tesla is the first company to bring electric vehicles into the mainstream.

• The company has since embarked on a mission to make full self-driving ubiquitous and introduce Optimus robots.

• BYD, however, has emerged as the EV leader in China.

• 10 stocks we like better than BYD Company ›

Electric vehicle (EV) stocks have certainly drawn interest from investors. Not only could EVs be the future of the automobile sector, but many of these companies are also working on greater technological innovations such as full self-driving (FSD).

Tesla (NASDAQ: TSLA), led by CEO Elon Musk, is considered one of the pioneers of the EV space and has become one of the largest companies in the stock market, with a market cap surpassing $1 trillion.

BYD (OTC: BYDDY) is making waves in China and has controlling market share with strong technology and vehicles that are more reasonably priced. While BYD does not sell its vehicles in the U.S., it has major expansion plans. Which is the better EV stock right now?

Tesla's stock has been nothing but volatile since President Donald Trump won the election last November. But through it all, it has still seen its price nearly double over the last year (as of May 20). However, its core EV business has struggled in recent years. The company has been ceding U.S. market share and has seen sales plunge globally.

In the first quarter of the year, Tesla reported deliveries of 337,000 cars, the lowest amount in over two years. And recent data does not show things to be improving.

Still, the company has been able to keep investor enthusiasm high with future initiatives. Closest on the horizon is unsupervised full self-driving (FSD). Musk said on the company's previous earnings call that he hopes customers will be able to use FSD technology by the end of the year. An upcoming Robotaxi demonstration in Austin, Texas, next month will be the first public glimpse into the new tech.

The company's FSD has driven more than 1 billion in testing. But there are still many questions over whether FSD is truly ready for commercialization and whether management will be able to hit its timeline.

Investors are also excited about the company's plans to release cheaper EVs and its Optimus robots, which supposedly will be able to complete household chores. Musk believes Tesla can scale up Optimus production quickly and build 1 million units by 2030. But its stock already trades at a massive valuation, making its margin for error slim.

U.S. based investors may be less familiar with BYD because it doesn't sell its vehicles in this country. But it's clear that the company has surpassed Tesla in China. In 2024, the company captured 34% of China's new energy vehicle market.