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Many car enthusiasts and investors have watched Tesla's stock price grow from $30 or $50 per share in late 2019 to over well over $1,000 today.

An electrifying price move to say the least!

Investors may be wondering what is the next great electric vehicle investment? It doesn't take long to find a handful of unprofitable and unproven companies. Allocating money to these unprofitable companies is not investing, but rather speculating.

Interestingly enough, many popular automotive magazines highlighted the dramatic changes undergoing at General Motors and Ford. Both companies expect all of their production to be electric by 2035 and looking at the recent line-up, many of the most popular choices will have full or partial electric options very soon.

By 2025, General Motors anticipates bringing 30 new plug-in models, and Ford recently debuted an all-electric F-150.

Electric vehicle market share currently stands at only 3%, with Tesla representing over 55% of the EV market share – a first-mover advantage. Investors need to carefully consider how much of the good news is priced into Tesla's stock price of 391x current earnings. If Tesla maintains its leadership, perhaps it can grow earnings quickly enough to sustain its current stock price.

On the other hand, General Motors and Ford both trade at price-to-earnings multiples far less than the broad stock market at 8 and 9.5x next year's earnings. To be clear, neither of these traditional automakers are expected to grow earnings-per-share as quickly as Tesla, but the risk-reward certainly looks more compelling.

Automakers, similar to airlines, have historically been lousy investments. Tremendous amounts of price competition, heavy reinvestment every year to develop new models, and low returns on capital. Will the high expectations built into the EV stock prices be followed by the growth and profits needed to propel the stocks higher? Only time will tell.

Beese Fulmer Private Wealth Management was founded in 1980 and is one of Stark County's oldest and largest investment management firms. The company serves high-net-worth individuals, families, and non-profits, and has been ranked as one of the largest money managers in Northeast Ohio.

This article originally appeared on The Repository: Ask the Rational Investor: Time will tell if it's safe to invest in electric cars