Finding the best EV stocks to buy in the market today can be a complicated affair. There are a lot of variables that would determine the best EV stocks, and a lot of that is going to come down to your personal view on how the electric vehicle market will shake out in years to come.
Those that are of the opinion that the first in to the market will capture the largest market share will be looking to the innovators and new companies that have pioneered the electric vehicle shake up. Those of the mind that the established automakers will be able to pivot, and ramp up production to levels not possible for a newer manufacturer will be veering towards the names of today that are making the most significant investment into their EV unit.
We will take a look here today at the best EV stocks to buy based on our own view. That is that a lot of the established names will be there in the future, alongside the best innovators of today. The likelihood is that once these established automakers of today start to ramp up EV sales and infrastructure, their valuations will start to trade a little more like the growth and innovators, than that which we find today.
You cant start an EV stock discussion without Tesla (TSLA)
Tesla (TSLA), one of the most successful electric car companies of our recent times, has shaken the stock market by making EV stocks more popular and mainstream. They are the pioneers of EV and have proven the case that if you can manufacture enough EV units, and sell them at reasonable prices, then the market for consumers is most definitely there.
With more and more companies moving towards and investing more money into electric vehicles rather than traditional petrol and diesel polluters, it is wise as an investor to take into consideration these new types of vehicles, the companies that manufacture them, and also how it may affect industry giants, such as General Motors (GM) and Ford (F).
Not all EV stocks are as successful as Tesla today, nor will be so successful in the future. Some EV stocks in fact do not perform well at all. With many of these innovative companies in their infancy, and probably using a lot of capital in research and development to fine tune their products, they might not necessarily be profitable for many quarters or even years to come. That being said, you should in no way discount these companies entirely, as their stocks may eventually soar.
The EV Stock Enthusiast Must Consider the Infrastructure Developers
EV stocks are not based solely on the vehicle manufacturers. There are battery makers, battery suppliers, charge point manufacturers, etc that also fit under the same umbrella of EV stocks. If you were considering a traditional petrol automaker play, with an expectation that demand, production and distance travelled were all going to soar, you would expect that the oil, petrol, repair, and second hand markets needed for this to happen would also benefit as a result.
In the case of EVs, and EV lateral stocks, many of these companies that will be providing the infrastructure are either just in their infancy, relatively speaking, or still potentially not in existence. Until demand has reached such a point that we know exactly what will be required, there may still be gaps in the market for years ahead. Those that have got out ahead include companies such as ChargePoint (CHPT), EVgo (EVGO) and Blink Charging (BLNK). These are companies that own and operate a whole network of charging points across the US and if EV really take off they will be the petrol stations of the future. There are also many other revenue models that these charging stations seem to be building into their business model , including most visibly at the moment, marketing and advertising revenue from advertisements being shown on the charging station screens. There are many others we could include in the list including Fisker (FSR), Faraday Future (FFIE), Canoo (GOEV) Lordstown (RIDE), and Chinese companies Nio (NIO), Xpeng (Xpev) and Li Auto (LI).
Another note to take on board are companies that make batteries and the like for commercial vehicles, and not just focus on personal vehicle markets. For example, Hyliion (HYLN) are developing electric power-trains for large vehicles such as big-rig trucks. They have made these batteries compatible with renewable natural gas and hydrogen fuel cells. This just goes to show that the EV market is versatile and with some research you can uncover some gems. Romeo Power (RMO) also focus on making battery packs for commercial EV fleets, QuantumScape (QS) has an innovative product in solid-state lithium metal batteries, and lastly Magna (MGA) work with industry giants such as GM and provide battery enclosures for the highly anticipated Hummer electric truck expected to launch late 2021.
Top EV stocks to put on your watch or buy list
1. Tesla (NASDAQ:TSLA)
Tesla (TSLA) is arguably the most popular EV stock of the moment, with the highly anticipated Cybertruck to be launched in 2022. Their vehicle deliveries have grown by 36% in 2020 to 499,647. Their Composite Rating sits happily at 90 with an EPS rating at 72. One of their most popular cars, Model S Plaid, is also their fastest car, managing speeds of 0 to 60 mph in just 2 seconds. Tesla is a lot more than just an automaker, and is pioneering the self driving vehicle future, with a huge number of feedback hours in their arsenal putting them way ahead of the rest.
When you add in a maverick but hugely influencial CEO in Elon Musk, Tesla is remaining top of our list to watch. They are continuing to innovate, have started to down the path of robotics and service automation and are undoubtedly one of the leading companies within this industry. Their exposure to the Chinese market in terms of current sales is higher than that of some others on this list, but as China is still the worlds’ largest automotive market, that is no bad thing longer term.
The share price of Tesla will typically trade at a huge premium compared to the traditional automakers, so the question becomes how much of their future expansion do the markets already have priced in. If you believe that EV is the future and that self driving will become an important service, Tesla will surely be a big part of that future.
2. General Motors (NYSE:GM)
General Motors is a heavy weight in the personal car industry and has also made our list as a ‘fast follower’. GM were the original fast follower to Henry Ford back in the days of the petrol vehicle growth phase, and proceded to rapidly outgrow Ford. Will this be a tale of the same story repeating, with Ford being changed for Tesla?
As mentioned above, the car industry is moving fast towards Electric and autonomous vehicles, and GM has increased their spending to $35 billion from a previous $27 billion. This is a long spending plan from now until 2025. GM also aims to launch a massive 30 new electric vehicle models around the world in this time.
All eyes are on GM, with their highly anticipated electric Hummer truck set to launch this year, an electric Cadillac SUV 2022, and another electric Hummer SUV 2023. These newer more sustainable versions of their classic trucks and SUVs will definitely excite GM fans, and their stock is one to watch as an EV play of the future.
GM currently manufacture almost 10 times the number of vehicles each year than that of Tesla, yet their market cap is paltry in comparison at almost 8 times smaller. GM also have priced their vehicles at lower price points than that to Tesla, making them potentially more affordable to a wider market base. That being said, the market clearly feels that there is a big difference in the these two companies as they stand today. The real question for value investors is what will the GM of the future look like?
3. Ford (NYSE:F)
Ford, with a composite rating of 72 and an EPS rating of 65; like GM are also big names within the industry, and to keep up with their competitor they have also increased their spending on electric vehicles. Ford has upped their spending by $30 billion by 2025. It is expected that 40% of their global sales will be generated by electric vehicles by 2030. A bold claim, but this will cement their position within the EV market. Ford has planned to launch 16 new fully electric cars by 2022. Ford’s signature F-150 lightning electric truck has approx 100,000 pre orders. Ford’s F-150 is supposed to rival Tesla’s Cybertruck, with their release dates coinciding. With the close rivalry within these companies, it is wise to keep close tabs on them.
4. Volkswagen (ETR:VOW3)
Volkswagen, a European heavy weight in personal car manufacturing has a five year plan for investing big into the EV space. The German automotive giant have pledged to spend $86 billion, which is aimed to get them a large share of the EV market for years to come.
VW has also planned to have 70 fully electric cars by 2030. In the last 12 months, they have already sold 231,600 fully electric cars, with plans to at least double that number by the end of this year. Lofty targets of 1 million sales of all electrified vehicles by the end of this year will put Volkswagen in a position to build on this platform. The quoted target also includes Plug-in hybrid vehicles. Although VW does not have a composite rating, it’s EPS rating is 95.
This is a European powerhouse in the personal car industry, and it is worth keeping an eye on the European markets as well as those in the US. You will find Volkswagen listed under the ticker symbol VOW3 on the German stock exchanges. Most of the trading platforms will facilitate purchase of German indexes as well as wider global exchanges.
5. Ferrari NV (BIT:RACE)
When speaking of the motor car industry, we cannot possibly leave out super-cars and there is no greater name in this area than Ferrari. One of the most famous sports car icons in the world, will launch its first all-electric super-car in 2025 and the hope from the Maranello is that this will not be too late. The prancing horse is by all accounts a symbol of cultural significance that will likely endure through the changes.
Ferrari NV has a composite rating of 76 and an EPS rating of 86 and you will find them listed under ticker symbol RACE. Ferrari have historically been against the shift to electric vehicles, but are now succumbing to the industry trends and pressures so as not to be left behind. Ferrari have focused on making hybrid super-cars, and have recently released their first hybrid electric vehicle, called the SF Stradale.
Whilst there is a smaller market for those who can afford a Ferrari, it is important consider both ends of the scales when it comes to EV stocks, since the high end, super-car market may be able to produce some of the best EV vehicles with their large research and development funds. There is also likely going to be no doubt of demand for the super and hyper car market just because the drive-train technology behind the chassis has changed. The prestige of a Ferrari will endure, electric of not.
6. Magna International (NYSE:MGA)
Magna Stock, with a composite rating of 61 and an EPS rating of 69, is an interesting company to watch. With talks of them possibly producing an Apple car, it is definitely one to keep a close eye on.
Magna already supplies various EV parts to other leading companies, and currently produces vehicles for BMW, Daimler and Jaguar. They will make Fisker’s Ocean Electric SUV from November 2022. They also have a partnership with LG Electronics (South Korea) to make e-motors, inverters, onboard chargers, and e-drive systems for electric vehicles.
As mentioned above, it is wise to not only look to large car manufacturers, well known car manufacturers, but to look at companies supplying the components for these. The supply and manufacture of batteries, charging points and other important components to manufacture electronic vehicles are an essential part of the supply chain puzzle.
7. Workhorse (NASDAQ:WKHS)
8. Chargepoint (NYSE:CHPT)
9. Novonix (ASX:NVX)
10. Nio (NYSE:NIO)
11. Lucid Motors (NASDAQ:LCID)
Electric Vehicles Are Not Going Away – Grow your portfolio with EV Stocks
In all, EV stocks appear to be the future, and you would be foolish to count out these forward thinking, future proofing companies. It is wise to take a wide view of different kinds of EV companies to invest in, and not only focus on famous car manufacturers. Although EV stocks are on the up (mostly) it is also important to note that the global chip shortage has been affecting the global auto industry in the short term, but in the longer term, governments all around the world are encouraging and supporting the move towards electric vehicles for the sake of our environment. EV vehicles are the future of the auto industry and it would be wise to capitalize on its relative infancy.