Tesla shares have plummeted this year amid the broader tech rout, and Morningstar's chief U.S market strategist thinks its fortunes may not improve any time soon. After rallying nearly 50% last year, shares of the electric vehicle maker has dived by more than 40% year-to-date. "We think Tesla is fairly valued at this point … I would certainly expect to see a lot of volatility in that name going forward," Dave Sekera told CNBC Pro Talks on Wednesday. Tesla is facing new competition, as both startups and legacy automakers offer new EV models — and analysts are expecting Tesla's share of the U.S. EV market to wane. In the second quarter, Tesla delivered 254,695 vehicles , just shy of analyst expectations. However, as a whole, demand for electric vehicles is expected to soar in the coming years, with sales set to surpass traditional vehicles. In the EU, for instance, lawmakers have voted to ban the sale of new diesel and gasoline cars from 2035 . For investors looking to play this electric vehicle boom, there are perhaps better and more interesting places to invest than in the big name EV producers, says Sekera. Stock picks Lithium, an essential metal used to produce EV batteries, is one sector that Sekera is positive on. "I think lithium is much more interesting," he told CNBC Pro Talks. He says there will be insufficient supply through 2030, going by his firm's projections. "So that's an area where we expect prices to stay high here in the short term," he said. "In the near term, all of the lithium providers we think are undervalued." The stock with the most upside, according to him, is Lithium Americas LAC . But Sekera warned that it's a "risky stock," as the firm is still in the pre-production stage — meaning it does not currently produce any of the metal. Lithium Americas is currently developing three lithium projects, and one is slated to enter production later this year, according to Morningstar. "For long-term investors who can tolerate the volatility, we see massive upside in the stock," Morningstar said in its third-quarter outlook report. Read more This fund manager oversees $10 billion. Here’s where he’s investing as inflation stays high The chip sector looks gloomy. But JPMorgan says these stocks will be a bright spot even in a recession Morgan Stanley names its top stocks in a ‘safe haven’ tech sector — giving one upside of 60% Another area set to benefit from the EV boom will be specialty chemicals, Sekera added. "When we look at what it takes to build an electric vehicle, it requires I think, two to three times more specialty chemicals in that manufacturing process than it does for just a regular internal combustion engine," he told CNBC Pro Talks. One such group of companies are specialty plastics producers, according to Morningstar, which sees long-term growth for the firms in this sector selling materials used in EVs. For example, EVs use 3.5 times more laminated glass in order to reduce noise, improve energy efficiency and increase battery life, the report said. Sekera named plastics producer Eastman Chemical as one stock set to benefit, as well as U.S. chemicals producer Dupont . "Instead of playing the actual manufacturers themselves, the lithium, the specialty chemicals and those parts suppliers leveraged to it are the better plays today," said Sekera.