Many companies participating in the EV sector are going public, while legacy automakers plan to release a plethora of electric vehicles over the next five years. Investing in this highly competitive and fast-growing industry is likely cloud computing stocks to be profitable, but it’s important to take steps to minimize your investment risk. Don’t invest in just one electric car company but hold positions in several companies of various sizes and consider buying shares in an ETF.
Recent delivery figures showed tremendous growth and analyst estimates were beaten comfortably. Not that electric vehicles don’t involve some emissions, because they do need electricity, and unless produced by renewable sources like wind or solar, that likely que es un broker means fossil fuels. Still, EVs can be an enormous improvement over time, and they represent a complete shift in how transportation happens. Overall, valuations across the industry have come down as shares have sold off, but the industry isn’t inexpensive.
So Tesla is no longer an expensive stock, especially for a company growing so quickly. You can expect more short-term jitters for Tesla, especially with the shutdown of its factory in Shanghai, and Musk’s ongoing Twitter saga. Maybe a broad approach to the EV space is best for long-term investors. EVs depend upon lithium batteries—and Albemarle is the world’s largest lithium producer, as well as one of our picks as the best lithium stocks. The company operates the only active lithium mine in the U.S., at Silver Peak, Nevada. XPEV’s vehicles are targeted at “tech-savvy middle-class consumers,” according to the company.
“The early stage of the EV boom was a bit of a free for all,” explains Sonia Joao, chief operating officer of Houston-based RIA Robertson Wealth Management. “Interest rates were cheap, and investors had a high tolerance for risk. In an environment like that, it’s not uncommon to see the riskiest bets pay off.” What we do know is that countries are introducing laws to help fight climate change. Governments worldwide are investing significant amounts of money into developing greener energy sources. Shares have recently decreased as there are concerns over the future demand for EVs.
For instance, Chile is the world’s largest producer of lithium, and the government there is seeking to take more control over the industry. That’s a risk for Albemarle, but it would seem that at current prices, the risk is already factored into the price. Apart from its ambitions in the EV space, perhaps the most compelling reason to consider an investment in General Motors is the stock’s valuation. And, frankly, its profit margins are about in line with Tesla’s. With that said, consider the shares of XPeng (XPEV, $14.98), a leading EV maker in China. It offers SUVs under the G3, G3i and G9 names; four-door sports sedans under the P7 and P7i brands; and family sedans under the P5 line.
The recent sell-off in electric vehicle stocks presents an attractive buying opportunity.
Tesla (TSLA) will remain king, but we do not want to chase and wait for a pullback that is currently in progress. NIO should continue to capture the strength of the Chinese market. Ford (F), which is well on the road with its Mach-E Mustang, has broken out of a multi-year downtrend. Apologies to holders of Rivian (RIVN), GOEV, Li Auto (LI), XPeng (XPEV) and others. Rivian is nowhere near profitable, with a negative gross margin in the first quarter of 2023. It reported a net loss of $1.35 billion on revenue of $661 million.
- I personally do believe that BYD’s stock is the most attractive one right now, due to its strong business growth and inexpensive valuation.
- Further, more than 90% of BYD’s vehicle deliveries for the month were fully electric or plug-ins.
- As a breakthrough technology, many—but not all—of the leading EV companies are growth stocks.
It intends to spend more than $30 billion on EVs through 2025. Its plans include setting up a nearly 6-square-mile campus in Tennessee to build electric F-Series pickups and batteries. Also, the company has partnered with Korea’s SK Innovation to set up two battery plants in Kentucky. Electric vehicles aren’t only being produced by new car companies. Legacy car manufacturers such as General Motors, Ford, Toyota and Ferrari all have plans to start producing electric vehicles. Some of these companies are even included in electric vehicle-themed ETFs.
Best-Value Electric Car Stocks
To understand the importance of EVs, you have to look at climate change and the carbon-based greenhouse gases that cause it. Transportation accounts for 20% of all global carbon dioxide emissions, as OurWorldInData.com reports. Three-quarters (15%) of all carbon emissions come from ground transportation, be it cars, buses or trucks.
The company is not currently profitable, and it faces competition from Tesla among others. But again, if the EV revolution comes to pass as expected, CHPT will likely see a major boost in revenue, and the profits should follow. Similar to XPeng, Nio (NIO, $10.64) is a leading manufacturer of electric vehicles in China. The company offers five and six-seater electric SUVs and sedans. Taking a page out of Tesla’s books, the company also offers home power solutions under the name Power Home.
Rivian Automotive Inc. (RIVN)
Investors buy these companies because of their growth potential, and the lifeblood of these companies is continuing to increase their sales numbers. Be wary if any of these companies show decreasing sales for more than a couple quarters, as that will likely have a negative effect on the stock price. Ford doesn’t offer investors the same potential for high returns, but it does offer lower volatility, greater stability and an impressive 4.75% dividend yield. Depending on your portfolio composition, shares of Ford could offer a safer way to get exposure to the EV market. Among Chinese EV stocks, XPEV stock has been the best performer in the last 12 months. With strong growth in deliveries and new product pipeline, XPeng is likely to break-out to the upside.
Lucid Group
The advanced lithium-ion battery production will commence in 2025. FSR stock is another interesting name among EV stocks that seems positioned for a big 2022. In the last 12 months, Fisker shares have trended higher by 7%. After an what is lot in trading extended period of consolidation, the stock seems positioned for a break-out. However, that’s unlikely to be a reason for the stock remaining depressed. Once vehicle deliveries accelerate, RIVN stock is likely to trend higher.
Electric Car Stocks With the Best Performance
That helped Tesla gain a valuation of more than $1 trillion. In addition, XPeng is making it easier than ever for people across China to enjoy free supercharging and fast charging services. It has a network of 1,734 chargers now available nationwide, including 550 branded stations. XPeng’s momentum continues to build; it 15,613 smart EVs in November alone. That’s an unprecedented total, and especially impressive considering their past delivery numbers have increased exponentially.
For investors banking on China’s economic growth continuing apace, this represents a tantalizing alternative for EVs market exposure. It has also become the largest car company in the world by market cap, traditional or electric—not to mention the eighth largest public company on the planet by capitalization. Our editors are committed to bringing you unbiased ratings and information. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the investing methodology for the ratings below. It’s also worth noting that the company launched XPeng P5 smart family sedan in October 2021.
At this point, the only uncertainty is just how quickly EV manufacturers will grow. But the shares aren’t excessively priced at 20 times forward earnings. And if the company’s investments in silicon carbide pay off as expected, its massive move since 2020 could be only the beginning. ON’s silicon carbide chips address the two major pain points of electric vehicles. They can extend driving range per charge compared with traditional silicon chips and they can help reduce the time it takes to charge a car battery. One of the major pain points on electric vehicles is finding a place to plug in when you’re away from home.
Lucid Group Inc. (LCID)
Here are my favorite five EV stocks that look attractive right now. As with XPeng and NIO, LI holds a listing in America and China. LCID set an ambitious manufacturing target of 20,000 Lucid Air sedans in 2022.
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