EV Stocks May Not Be As Infallible As You Think

The stock market is giving incredibly high valuations to electric vehicle stocks, whether the companies have proven themselves effective manufacturers or not. Tesla (NASDAQ: TSLA) is one of the most valuable companies in the world, while start-ups like Lucid Motors (NASDAQ: LCID), NIO (NYSE: NIO), and Xpeng (NYSE: XPEV) are worth tens of billions of dollars with very little production, and a company like Rivian is eyeing a potential $80 billion valuation in an IPO.

Meanwhile, older manufacturers like General Motors (NYSE: GM), Ford (NYSE: GM), Toyota (NYSE: TM), Honda (NYSE: HMC), and Volkswagen are trading for less than the market's price-to-earnings ratio, as you can see below, indicating that investors don't think highly of their earnings growth potential. Is this because EV companies are disrupting the old guard or because EV stocks are overvalued? Let's take a look.

Source Fool.com