Electric cars, sometimes known as "E.V.s" for "electric vehicles," are automobiles with electricity-powered motors instead of gas-powered engines. E.V.s do not require gasoline or diesel fuels.
Electric car stocks include mainly manufacturers of electric vehicles. In addition, companies that produce electric vehicle components, such as batteries and autonomous vehicle systems, might be categorized as a subset of the electric car market.
Electric vehicle stocks performed poorly in the first quarter of 2022. According to the most recent analysis by Bank of America, vehicle manufacturing fell across the board, primarily owing to headwinds in China. This, along with ongoing pressure from COVID-19 and a semiconductor scarcity, has significantly elevated the sector's risk profile. However, investors seeking long-term investments can still discover value in electric vehicles (E.V.) and battery stocks. Here are the top 10 E.V. stocks to purchase.
What Makes the Electric Car Industry Different?
Due to its youth, the electric car business differs from the traditional automotive industry. Until recently, just a few companies produced electric vehicles, but now every major carmaker is either developing or manufacturing an E.V.
Tesla is the sole established industry leader, as E.V.s is a relatively new phenomenon. It is difficult to determine which firms will ultimately dominate the electric car market because startup E.V. manufacturers can compete with established automakers for E.V. market share. This uncertainty makes investment in the electric car business riskier than adding automotive industry exposure to a portfolio.
The Future of the Electric Car Industry
The U.S. infrastructure package passed into law late last year finally eliminated several EV-related measures, but financing for E.V. charging was preservedștii. The measure allocates $5 billion to states to develop a national charging network and $2.5 billion for grants. Access to charging infrastructure is still an issue for E.V. owners, so this multibillion-dollar investment in charging should help increase the long-term popularity of electric vehicles.
In the next five years, legacy automakers aim to release many electric vehicles, while many E.V. sector businesses are going public. Investing in this highly competitive and rapidly expanding market is likely to be successful, but you must take precautions to reduce your investment risk. Rather than investing in a single electric car firm, consider holding interests in multiple companies of varying sizes and purchasing ETF shares.
1. Tesla Inc (NASDAQ: TSLA)
The Palo Alto, California-based company Tesla has become synonymous with the E.V. business. Elon Musk, its billionaire founder and CEO, has kept it at the forefront of electric vehicle development.
Even in the face of the COVID-19 outbreak, investors have flocked to the stock, resulting in a spike in share prices over the past year. Tesla's share price rose from approximately $171 per share in February 2020 to a peak of nearly $900 per share in early 2021, before retracing to over $620 per share in June 2021.
It's too late to benefit from those gains, but analysts expect this fast-rising stock to surge further.
After releasing the company's first-quarter earnings report, Musk highlighted rising vehicle deliveries and reiterated his forecast for a 50 percent year-over-year increase in this metric until 2021.
In addition, the corporation has numerous future catalysts to anticipate:
New Automobiles Diverse analysts have noted that while its vehicles are in high demand, they only cover roughly 15% of the market opportunity. Experts anticipate that the corporation will offer new models that will allow it to attract a broader audience.
Cybertruck. Investors have awaited the release of the Tesla Cybertruck, an electric truck with a sleek new design, for some time. As one of the first electric trucks to join the market, it is anticipated that the Cybertruck would generate a tremendous amount of demand. The vehicle will begin production later this year, with deliveries starting as early as late 2022.
Electric Vehicle With electric cars and trucks on Tesla's vehicle range, just electric vans are absent. Musk stated on the conference call following Tesla's fourth-quarter results report that the business is working on an electric van product, although there is no timetable for its introduction. Since January 2021, there has not been much discussion concerning the electric van. Consequently, an update is likely forthcoming, boosting the stock price.
Plaid Shipping. In only two seconds, the Plaid vehicle can accelerate from 0 to 60 miles per hour, making it one of the fastest automobiles on the road. With a price tag of $130,000, many consider this a niche vehicle. However, experts such as Mark Delaney from Goldman Sachs anticipate that deliveries will exceed forecasts, which may send the stock flying.
While the stock may have been pricey earlier in the year, there is a compelling argument that it is currently undervalued, given its phenomenal growth in revenue and profitability, upcoming catalysts, and the fact that share prices have declined by more than 30 percent from their January highs.
Overall, it is rarely a wise idea to wager against the pioneers of any business, and Tesla stock is unlikely to prove to be an exception.
2. Rivian
When Rivian went public at the end of 2021, investors were quite enthusiastic. An initial public offering (IPO) valued at $12 billion was one of the most significant in U.S. history. After its debut, Rivian's market value momentarily surpassed $150 billion.
When Rivian went public, the company had barely delivered any electric trucks or SUVs, so buying in its shares was the ultimate leap of faith. The company produced more than one thousand vehicles in 2021.
Rivian has approximately 70,000 preorders. However, these orders are refundable, and thus they may not necessarily reflect the company's actual vehicle need. In March, the corporation infuriated customers by announcing hefty price increases for future vehicle delivery, which affected nearly all preordered vehicles. In response to customer complaints, Rivian returned the original prices for preorders. However, the move certainly harmed the company's brand.
Since its peak in late 2021, Rivian shares have plummeted, and the business is currently worth approximately $46 billion, which is still a highly optimistic value. Therefore investors should be aware that Rivian is one of the riskiest electric car market investments.
3. Nio Inc (NYSE: NIO)
Nio has become a prominent stock market issue as one of Tesla's leading competitors. The company is a Chinese electric automobile startup with numerous products gaining traction on the market.
Nio is ultimately a double emerging market play. In addition to participating in the developing electric vehicle market, the company's location in China, an emerging country that is rapidly becoming developed, is a recipe for massive success.
Initially, investors were uncertain about Nio. Before 2019, revenues had decreased, and many feared the corporation was on the verge of bankruptcy. Last year, however, sales made a remarkable rebound, and it is anticipated that this trend will continue until 2021.
By January 2021, sales had surged by more than 350 percent, bolstering the stock's worth. Simultaneously, the company introduced the Nio ET7, a sleek, fully-electric sedan, which further piqued the interest of investors. The business sold 6,711 new vehicles in May, and a staggering 95 percent rise was year-over-year.
Investors view the ET7 as a possible blockbuster. Consumers confined during the COVID-19 outbreak are now stepping out, causing the demand for electric vehicles (E.V.s) in China to continue to rise.
Nio also appears to anticipate a significant increase in demand for its E.V.s, as seen by its production capacity. According to Nasdaq, the corporation has recently spent considerable sums of money on infrastructure to increase its production capacity, which currently stands at approximately 150,000 vehicles for 2021.
Although the business is not yet profitable, it is quickly moves in that direction. The most recent quarter saw a loss of $0.14 per share reported by the corporation. While the amount fell short of expert expectations, it represented a significant improvement over the $0.39 per share loss posted in the fourth quarter of 2020. As a result of the increased demand and production capacity, many think that profits are imminent.
As demand rises, Nio continues to innovate, and the worldwide emphasis on clean energy grows, the stock becomes a greater investment possibility. Add to it the company's rapid approach to profitability in two emerging markets, and the store becomes difficult to ignore.
4. XPeng
Consider XPeng, which trades in the United States as an American depositary receipt, as a second play on the Chinese E.V. market (ADR). The Guangzhou-based business went public in 2020, during the height of the E.V. stock mania. While the shares have been traded in the United States for less than two years, XPEV has been in existence since 2014.
XPeng is comparable to Tesla from a Chinese perspective. In addition to manufacturing electric vehicles, the business is researching autonomous driving technology and operating a charging station network.
XPEV operates 772 supercharging stations in 308 Chinese cities at present. This provides the corporation with a substantial competitive edge on its home market, allowing it to offer its consumers free charging life services.
Its cars are still relatively obscure in the United States, but the G3 SUV and P7 sedan are the company's best-selling vehicles in China. The company delivered 15,414 automobiles in March, a 202 percent rise compared to last year's same month.
XPeng has struggled this year, as have the other E.V. stocks on our list. Shares of the electric vehicle manufacturer are down around two-thirds from their all-time highs and by more than half so far in 2022. XPeng is on the riskier side of the electric vehicle industry, but if you believe the Chinese E.V. story, it's worth a look.
5. Lucid
Lucid is another E.V. stock that has gained traction lately. This automaker specializes in E.V.s, E.V. powertrains, and battery solutions. The company's Lucid Air is the outcome of its emphasis on technological innovation and a clean-sheet engineering and design methodology. The Lucid Air is an all-electric vehicle aimed toward non-luxury buyers. Over the past week, LCID stock has climbed approximately 20 percent, which is remarkable. Now, investors should be aware that there may be further reasons to be positive.
Lucid has announced that its DreamDrive Pro advanced driver assistance system will receive new capabilities shortly. It will be constructed using the DRIVE Hyperion technology from NVIDIA (NASDAQ: NVDA). This sophisticated software is already integrated into every Lucid Air on the road for those unaware. This enables Lucid to produce future-ready, future-safe E.V.s. It can increase in capability over time by combining advanced hardware with frequent over-the-air software updates and an in-house software stack.
Additionally, the corporation announced the signing of agreements with the Saudi Arabian Ministry of Investment last month. The arrangement would pave the way for a full-scale manufacturing facility in Saudi Arabia. This would benefit the country because it would help the region's strategic goal of modernizing and diversifying its economy through the growth of renewable energy and transportation. Over the next 15 years, Lucid anticipates that this manufacturing facility could provide up to $3.4 billion in value for the company. Additionally, it should meet the increasing demand for its products and services. Considering everything, would LCID stock be a top E.V. stock to monitor?
6. Ford (NYSE: F)
Ford is another automobile industry pioneer, holding a prominent position for more than a century. The corporation has endured the ups and downs of the auto market and remained an innovation leader. This is not a business that is likely to pass up an opportunity.
Consequently, the corporation is also competing to be the market leader in electric automobiles.
On the market today, Ford offers two electric vehicles:
Falcon Mach E As the king of muscle cars, Ford would not be doing its fans any favors by abandoning the Mustang in favor of an electric counterpart. Therefore, it is not surprising that the company's first electric vehicle is called the Mustang Mach E., Demonstrating the power of electric cars. The Mustang Mach E reaches top acceleration in less than one second and has few maintenance requirements, cutting the cost of ownership.
The E-Transit 2022 Ford also intends to create commercial cars to compete with General Motors, its old adversary. The 2022 E-Transit appears to have the potential to accomplish this. The commercial van has ample space for hauling packages and other commercial applications. Sadly, the range is inferior to the BrightDrop EV600, with only 126 miles of content on a full charge.
These are the first of many 100 percent electric vehicles that this auto industry leader is planning to deliver shortly.
In addition, the company formed a relationship with Google only recently. The two businesses will collaborate to upgrade Ford's production facilities using visual A.I., create new purchasing experiences, and develop new offers using connected vehicle data.
Given that the auto business of the future will combine technology and traditional mechanics, a partner like Google is a significant advantage for any company.
Like investing in General Motors, investing in Ford is an investment in a long-standing firm that has not only weathered the ups and downs of its sector and the economy but has also thrived. Now that Google is on its side, this classic winner is even more desirable, making it a stock to watch.
7. Nikola
Nikola is a startup that aspires to revolutionize the transportation industry worldwide. Simply put, the company designs and manufactures zero-emission battery-electric and hydrogen-electric cars and their associated components. Nikola's product portfolio primarily consists of battery-electric and hydrogen-electric powered commercial trucks, off-road vehicles, and watercraft. The company released first-quarter financial results that startled Wall Street experts last week.
The company's initial revenue of $1.89 million exceeded expectations by around $100,000. This revenue surprise is due to sales of Nikola's mobile charging trailers, a subsidiary business line. As for its results, Nikola posted a loss of $0.21, which was less than the $0.27 loss that experts had anticipated. In April, the business delivered its first Tre semi-trucks to consumers, regardless of its financial standing. In addition, the company claims to have orders for more than 500 Tre vehicles. Additionally, the company reports that it remains on pace to manufacture and deliver 300 to 500 automobiles to customers this year. Therefore, should you purchase NKLA stock?
8. Fisker
Fisker is another renowned name in the E.V. market. The company is named after Henrik Fisker, a famed automobile designer. Fisker's primary objective is to create the market's most eco-friendly E.V. In doing so, the company aims to become the leading e-mobility service provider with the most environmentally friendly vehicles globally. Currently, the company is diligently working on the Fisker Ocean electric SUV. The FSR stock price has been stagnant for the past year. Could things possibly improve soon?
On May 4, the E.V. firm released its financial results for the first quarter. Even though the company has not yet begun to generate income, it is making tremendous progress toward manufacturing its Fisker Ocean SUV. Specifically, production is scheduled to start on November 17 later this year, and physical testing of its Fisker Ocean has already begun. Considering the demand, Fisker anticipates SUV reservations of over 40 thousand. In addition, the company has over $1 billion in cash and cash equivalents, which is sufficient to fund the November production launch of the Fisker Ocean.
9. Stellantis
Stellantis is a worldwide automaker that warrants close monitoring. Stellantis, headquartered in Amsterdam, is one of the world's largest automakers. The firm was founded by merging PSA Group and Fiat Chrysler Automobiles. Its portfolio of vehicle brands includes illustrious names such as Maserati, Peugeot, Dodge, Jeep, Chrysler, Fiat, and Alfa Romeo, among others. Stellantis has a global presence in more than 130 countries.
Stellantis announced its first-quarter sales on May 5. Increasing by 12 percent, revenues increased to $43 billion. The company attributes this increase to its competitive pricing and attractive vehicle mix. The increase in North American revenues by 30 percent to over $22.1 billion was impressive. Its mobility branch Free2move agreed to acquire car-sharing company Share Now last week in related news. The agreement intends to add 14 major European cities and 10,000 cars to Free2move's current fleet of 2,500 vehicles.
10. General Motors
Let us conclude the list with the automaker's most extended history, General Motors. Traditionally, the corporation designs, manufactures, and sells trucks, crossovers, vehicles, and auto parts globally. In addition, it offers vehicle financing services via its General Motors Financial Company. In recent years, General Motors has also increased its electrification initiatives and autonomous driving technology.
For example, the business and POSCO Chemical announced that they would collaborate with the Canadian and Quebec governments earlier this month. The cooperation is anticipated to cost $400 million to construct a new facility in Quebec. The factory will manufacture cathode material for G.M.'s Ultium batteries, and these batteries will be used for electric power vehicles such as the Chevrolet Silverado, GMC HUMMER, and Cadillac LYRIQ. With this in place, the firm is one step closer to achieving its goal of having the capacity to manufacture 1 million E.V.s in North America.
Moreover, General Motors stated that it would pay $2.1 billion to acquire SoftBank Vision Fund 1's interest in self-driving startup Cruise LLC. This would conclude the Japanese investment firm's participation in the enterprise. In addition, the corporation asserts it would invest an additional $1.35 billion in Cruise. As a result, General Motors will have greater ownership and control of Cruise. As it prepares for the future of the automotive industry, the corporation appears to be on the right track.
Conclusion
The electric vehicles market is intriguing and has attracted a great deal of investor interest. As the worldwide perspective on energy changes rapidly, it is expected that the demand for these environmentally friendly automobiles will continue to rise.
E.V.s are also the consequence of a novel convergence of traditional mechanics and cutting-edge technology, which makes them a very intriguing issue.
Despite the danger associated with investing in electric vehicles, there is no risk-free investment, so it is essential to conduct research before purchasing any stock. Everything appears to be coming into place for the sector, laying the environment for a continuation of the remarkable rise among industry leaders over the past year.
Therefore, there are several opportunities in the market. When investing in space, you should consider the dangers and conduct research. By making well-researched, well-considered investment decisions, you stand to achieve profitability that exceeds industry standards.
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