Risk-averse investors probably wouldn't have enjoyed holding Tesla (TSLA -0.05%) stock last year. Halfway through the year, Tesla shares were down by over 20% even as the S&P 500 index had marched 15% higher. But 2024 was a tale of two halves for Tesla stock, and it ended the year with a monster 62.5% gain, according to data provided by S&P Global Market Intelligence.

Shares of fellow electric vehicle (EV) makers Rivian Automotive (RIVN -2.53%) and Lucid Group (LCID 1.34%) also had a tough start to 2024. But those stocks didn't recover, ending the year down by 43.3% and 28.3%, respectively. The returns of these EV maker stocks may not repeat in 2025, but the lessons from 2024 should still apply.

Accept the risks in stocks

Tesla was a model for stock investors learning about risk and volatility in 2024. Shares were down by about 43% at the low in late April and up by as much as 93% at the high in mid-December. The recovery in the second half of the year came for several reasons that might help determine where Tesla stock goes in 2025.

EV start-ups Rivian and Lucid have their own potential catalysts to boost shares in 2025, but risks remain high for those stocks. Even considering the winning year that Tesla shareholders experienced, investors in the EV sector should be comfortable understanding the risk profile in general.

Uncertain EV demand picture

One of the biggest drags last year on the EV sector was a question of sagging consumer demand. Slower sales growth led some EV producers to throttle back expansion plans. Even Tesla pushed back a previously announced plan to build a new factory in Mexico. Last year was the first that Tesla failed to increase EV deliveries year over year since it began producing meaningful volumes. It did come close, however, with a drop of just over 1%.

But Tesla's strong financial condition allows it to weather a slowdown. Rivian and Lucid remain unprofitable, however, and losses are mounting for both companies. Investors reacted by selling both stocks with sales and production volumes still well below where they need to be.

This year will be important for both as new products are being introduced. Rivian's production volume held steady as it spent some time retooling its plant to prepare for the next-generation R2 electric SUVs it will start making later this year. Rivian also suffered a parts supply issue that slowed production levels. The company says that supply chain issue is now in the past.

Lucid delivered over 10,000 vehicles for the first time in 2024, and will begin selling its new Gravity SUV in 2025. Like its Air sedan, that vehicle will also cater to luxury buyers. Investors shouldn't expect Lucid shares to rebound in 2025 unless the company reports impressive Gravity orders and sales.

Beyond Tesla's EVs

Tesla stock gains accelerated in the latter months of 2024 as investors viewed President-elect Donald Trump's victory as a potential boon for the company. Even if the incoming administration eliminates incentives for EV adoption, the EV leader is in a strong position as competitors struggle to stem losses.

And Tesla is more than an EV company. Its energy segment is growing quickly. Energy storage needs are increasing as renewable energy production continues to increase. Tesla's energy storage deployments increased 114% year over year. The company has also invested heavily in artificial intelligence (AI) infrastructure as it seeks to perfect its full self-driving (FSD) software. That could lead to additional subscription revenue from Tesla owners as well as a potential fleet of self-driving taxis.

Robotics is another division of the business that could provide a major potential boost to earnings. The future potential is much of what investors see with Tesla. And it's why the stock is more in favor than other EV companies. While risks remain in terms of both valuation and execution, it likely will maintain its lead over other EV makers for investors in 2025.