Written by MarketBest Staff
January 22, 2021
I’ll start with a disclaimer. You won’t see Tesla (NASDAQ:TSLA) or Nio (NYSE:NIO) on this list. And that’s not because I’m being contrarian. I just view Tesla and Nio as the known quantities in the electric vehicle sector. The goal of this presentation is to help you identify stocks that may be flying under your radar.
Many EV stocks went public in 2020 via a special purpose acquisition company (SPAC). There is both good and bad to that story. The good is that investors have many options for investing in the EV sector. Many of the companies that have entered the market are attempting to carve out a specific niche.
The potentially bad news is that these stocks are very speculative in nature. Whereas companies like Tesla and Nio have a proven (albeit recent) track record, there are things like revenue and orders that investors can analyze. With many of these newly public companies, investors are being asked to buy the story more than the stock and that is always risky.
However, in this special presentation, we’ve identified seven companies that look like they have a story that is compelling enough that investors should be rewarded in 2021.
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- Canoo
- XL Fleet
- Fisker
- Electrameccanica Motors
- Workhorse Group
- Arcimoto
- Ford
#1 - Canoo (NASDAQ:GOEV)
Keeping in mind that most of the companies on this list are speculative plays on the EV sector, there is a compelling case for Canoo (NYSE:GOEV). Canoo offers investors real differentiation that could turn out to be extremely significant.
The design of Canoo’s multipurpose delivery vehicle (MPDV) features a “skateboard” platform and will be the first to use a “by wire” design. The idea is that the skateboard chassis will provide a template upon which the company can build a variety of EVs much faster. The “by wire” design is also significant because it allows a complete rethinking of the interior space to allow maximum space now. But the real potential is that it will enable autonomous driving capability in the future.
Canoo will not bring a vehicle to market until 2022. But when they do, they will be promoting a pay as you go model which will make it very akin to a SaaS company. Consumers can lease a vehicle for a specified period of time (at least 30 days). When the lease expires, they can extend it or simply return the vehicle.
About Canoo
Canoo Inc, a mobility technology company, designs, develops, markets, and manufactures electric vehicles for consumer, commercial fleet, government, and military customers in the United States. the company utilizes its multi-purpose platform architecture, a self-contained, fully functional rolling chassis that directly houses the critical components for operation of an electric vehicle, including its in-house designed proprietary electric drivetrain, battery systems, advanced vehicle control electronics and software, and other critical components.
Read More - Current Price
- $0.48
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 5 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $22.71 (4,631.9% Upside)
#2 - XL Fleet (NYSE:XL)
XL Fleet (NYSE:XL) manufactures hybrid and plug-in powertrains. The idea is that the company’s products can be retrofitted on traditional gas-powered vehicles to make them hybrid vehicles. And the company has its own fully electric powertrains.
Although the product sounds very unique, XL Fleet does have competition in this sector, most notably from Hyliion (NYSE:HYLN). However, XL Fleet does appear to have an important first move advantage as its design is already being used in select Ford (NYSE:F), General Motors (NYSE:GM) and Isuzu (OTCMKTS:ISUZY) fleet trucks.
XL stock has been falling from its December 2020 highs. But that’s not surprising for a company coming off its IPO, particularly since it just completed the merger on December 22. However, the stock has recently pushed past the $20 mark and may be moving higher after it received a bullish price upgrade to $30 from Gregory Lewis of the analyst firm BTIG.
About XL Fleet
XL Fleet Corp. provides fleet electrification solutions for commercial vehicles in North America. Its products include hybrid electric drive systems are comprised of an electric motor that is mounted onto the vehicle's drive shaft, an inverter motor controller, and a lithium-ion battery pack to store energy to be used for propulsion; plug-in hybrid electric drive system, which are fitted to vehicles.
Read More - Current Price
- $1.14
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#3 - Fisker (NYSE:FSR)
Fisker (NYSE:FSR) may be an example of buying the designer rather than the car. One of the reasons that Fisker generated excitement as it went public was the company’s founder, the visionary designer, Henrik Fisker.
The company is developing an electric SUV, the Ocean. The differentiating feature of Fisker’s offering will be that the Ocean will be made, in part, out of recycled materials from the ocean. And the company has 10,000 non-binding pre-orders.
Plus, the company has an agreement with Magna International (NYSE:MGA) to outsource the manufacturing of the Ocean. This may leave investors concerned about sacrificing some of the sustainable features that would make the car unique in the name of efficiency, but that’s a story for another day.
Investors will have to wait to see revenue. But that’s true for many of these EV stocks. However, the stock has come down by about 33% from its post-IPO surge making the shares far more attractive.
About Fisker
Fisker Inc develops, manufactures, markets, leases, or sells electric vehicles. It operates through three segments: The White Space, The Value Segment, and The Conservative Premium segments. The company is also involved in asset-light automotive business. In addition, it offers fisker flexible platform agnostic design, a process that develops and designs electric vehicles in specific segment size.
Read More - Current Price
- $0.09
- Consensus Rating
- Reduce
- Ratings Breakdown
- 0 Buy Ratings, 4 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $1.30 (1,349.3% Upside)
#4 - Electrameccanica Motors (NASDAQ:SOLO)
If you want a really speculative play in the EV market, you can look at Electrameccanica Motors (NASDAQ:SOLO). The company is manufacturing a three-wheeled vehicle that actually falls into the class of a motorcycle. And that’s only one reason why the stock is both risky and intriguing.
The concept is a one-person vehicle (hence the ticker SOLO). And the idea is that like the Smart car of years gone by, Americans are ready for a single-seat vehicle. I’m not so sure, but the vehicles may be an alternative to public transportation for the post-pandemic business traveler. And Electrameccanica is looking into a vehicle that includes slightly more storage capacity that will allow them to capture some commercial sales, specifically food delivery and last-mile service.
A theme you’ll notice in this presentation is that you should have realistic expectations and the stock price should reflect that. Late last year, SOLO stock had a market capitalization that exceeded $1 billion. At that time, shares of SOLO stock were trading for about $11 share. Today, the stock trades for under $9 ($8.29) and its market cap sits at around $677 million.
About Electrameccanica Vehicles
Electrameccanica Vehicles Corp. develops, manufactures, and sells electric vehicles in the United States and Canada. Its flagship product is the SOLO, a single seat vehicle. The company is also developing four-wheeled eRoadster and Tofino. In addition, it provides services, repairs, and support services, as well as sale of parts and custom built vehicles.
Read More - Current Price
- $0.21
- Consensus Rating
- Hold
- Ratings Breakdown
- 0 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $0.40 (88.5% Upside)
#5 - Workhorse Group (NASDAQ:WKHS)
Another stock that is coming down from previous highs is Workhorse (NASDAQ:WKHS). What I like and what concerns me about the company is the same. The company serves the commercial market in the all-important last mile delivery. However this is a sector that is becoming very crowded.
The pandemic has accelerated a shift towards e-commerce. And that should mean that Workhorse will be able to maintain a competitive position in the market. The company does count DHL (OTCMKTS:DPSGY), FedEx(NYSE:FDX), W B. Mason, and Ryder (NYSE:R) as customers.
However, the company was doing business with Amazon (NASDAQ:AMZN) and UPS (NYSE:UPS). But that business has moved. And the company is waiting on the United States Postal Service to announce if Workhorse will be one of the companies that will manufacture the agency’s next generation of delivery trucks.
Several analysts, have given WKHS stock a price target far above its current price, which is higher than the consensus 12-month price target.
About Workhorse Group
Workhorse Group Inc, a technology company, engages in design, manufacture, and sale of zero-emission commercial vehicles in the United States. The company offers commercial vehicles under the Workhorse brand. The company was formerly known as AMP Holding Inc and changed its name to Workhorse Group Inc in April 2015.
Read More - Current Price
- $1.05
- Consensus Rating
- Reduce
- Ratings Breakdown
- 0 Buy Ratings, 2 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $5.63 (435.7% Upside)
#6 - Arcimoto (NASDAQ:FUV)
If you think SOLO stock might be a fun bet, than I’ve got another one for you. Arcimoto (NASDAQ:FUV) is another manufacturer of three-wheeled electric vehicles. The difference between the two vehicles is that Arcimoto’s Fun Utility Vehicle (FUV) is a two-seater.
It’s not going to be the vehicle you use to bring home a large load of groceries (but hey, you’ll just get those delivered), but it can be driven on the highway and the fact that you could have a companion may add to its appeal.
Plus, the company has two additional models. One called the Rapid Responder model is for security, emergency, and law enforcement services. A second model, the Deliverator, is for last-mile service.
The stock is moving higher on news that the company announced its agreement to purchase a 185,000 square foot factory which will help it meet its goal to expand production capacity to 50,000 vehicles per year within the next two years.
About Arcimoto
Arcimoto, Inc designs, develops, manufactures, sells, and rents three-wheeled electric vehicles in the United States. Its flagship product is the Fun Utility Vehicle (FUV) use for everyday consumer trips. The company also provides Deliverator, an electric last-mile delivery solution to get goods where they need to go; TRiO, a bolt on kit that converts a two wheeled motorcycle into a tilting three wheeled motorcycle; and Arcimoto Flatbed, a prototype that eschews the rear seat.
Read More - Current Price
- $0.00
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#7 - Ford (NYSE:F)
Ford (NYSE:F) was one of the earliest adopters of electrification. However, the company has had more than a few speed bumps on its way to an electric future. But the venerable automaker may be starting to prove the idea that often times big changes happen slowly, and then all at once.
Seemingly overnight, the technology for electric vehicles has emerged and now the company’s investment of billions of dollars in electrification may be putting it in a prime position to benefit from this trend.
The company is already getting an enthusiastic response for its Mustang Mach-E which will be available sometime this year. And the company has more products on the way, including and electric version of its F-Series hybrid pickup truck.
F stock is on a tear lately and has pushed past its 52-week high. Analysts have been lukewarm on the stock, but recently JP Morgan Chase (NYSE:JPM) gave the stock a $14 price target which would be about a 20% gain from F stock’s current price.
About Ford Motor
Ford Motor Company develops, delivers, and services a range of Ford trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide. It operates through Ford Blue, Ford Model e, and Ford Pro; Ford Next; and Ford Credit segments. The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors and dealers, as well as through dealerships to commercial fleet customers, daily rental car companies, and governments.
Read More - Current Price
- $10.73
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 10 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $12.02 (12.1% Upside)
The EV revolution is happening. In his first week of taking office, President Biden has taken concrete steps that demonstrate his commitment to moving away from fossil fuels. And there’s likely more action to come on his agenda to tighten fuel standards for internal combustion (ICE) vehicles.
That doesn’t mean we’re all going to start driving electric vehicles tomorrow. The transition in the United States may be years away. For example, the announcement from General Motors (NYSE:GM) that 40% of its U.S. vehicles will be electric by the end of 2025 shows that while the movement is happening, full adoption is years away.
However electrification is clearly the future of transportation in this country. And now is the time to begin investing in the companies that will lead the way.
And if you’re hesitant to jump in on any one of these stocks there are many ETFs that can give you exposure to this hot sector. Two great choices are the Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) and the iShares Self-Driving EV and Tech ETF (NYSEARCA:IDRV). Both of these funds give you exposure not only to vehicle manufacturers but to the companies that are developing the supporting technology.
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