The electric vehicle (EV) market remains one of the markets that growth-oriented investors simply have to be in. This sector is at the intersection of multiple secular trends (e.g. autonomous driving, renewable energy). And, after years of false starts, it appears that EV technology is ready to be produced at scale.
Think about this. There is an average of 90 million vehicles sold annually. That’s units, not dollars. Total sales of vehicles topped $3.1 trillion in 2019, and the number is expected to grow over the long-term.
The EV market is less than 3% of global vehicle sales, but it’s growing. EV is expected to account for more than 50% of the total auto-fleet by 2050, and that target could be reached much sooner if battery technology advances.
When it comes to the EV market, it’s a “rising tide lifts all ships” kind of market, but there are still some clear winners to focus on. In this special presentation, we’ll take a look at eight companies that are among the best in the current crop of EV and EV-related companies.
Quick Links
- Xpeng
- Nio
- Li Auto
- Tesla
- Ford
- Blink Charging
- Lucid Motors
- Fisker
#1 - Xpeng (NYSE:XPEV)
Not surprisingly, Chinese EV manufacturers are going to take the top spots on this list. While the EV market in the United States is still in its early stages, China continues to be the epicenter of EV adoption. This was evident in the July delivery numbers. Xpeng (NYSE: XPEV) reported deliveries of 8,040 smart EVs. This was a 22% increase from June and a whopping 228% year-over-year increase.
In addition to selling EVs, the company also provides value-added services such as supercharging services, maintenance. And the company has its own vehicle leasing service.
XPEV stock made its debut in late August 2020. The stock currently trades at around $43 per share. That’s down significantly from its 52-week high of over $74 per share. However, analysts give the stock a 12-month price target of over $51 per share, a 20% gain from its current level.
Another encouraging sign for investors is that institutional ownership, while still around 20%, has been increasing significantly.
About XPeng
XPeng Inc designs, develops, manufactures, and markets smart electric vehicles (EVs) in the People's Republic of China. It offers SUVs under the G3, G3i, and G9 names; four-door sports sedans under the P7 and P7i names; and family sedans under the P5 name. The company also provides sales contracts, super charging, maintenance, technical support, auto financing, insurance, technology support, ride-hailing, automotive loan referral, and other services, as well as vehicle leasing and insurance agency services.
Read More - Current Price
- $12.64
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 5 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $11.20 (11.4% Downside)
#2 - Nio (NYSE:NIO)
A bullish vote of confidence from the Chinese government is lifting all of that country’s EV makers. On July 30, 2021, China’s Central Committee called for more support for the domestic EV market. While this pronouncement is likely to help all of the country’s EV manufacturers with government subsidies, it brings to mind the good fortune that befell Nio (NYSE: NIO).
Nio was headed nowhere fast. In fact, many market observers (including yours truly) thought Nio was headed for bankruptcy. But the Chinese government intervened, and after that point, the news has been bullish for Nio. The company has layered innovations like its battery-as-a-service (BaaS) initiative along with rising delivery numbers and NIO stock has shown spectacular gains in the process.
At one point, NIO stock rose as high as $66.99 and an early summer rally took the stock back over $50. The company is set to report earnings in mid-August. A solid report may be just the catalyst the stock needs to start testing that 52-week high.
About NIO
NIO Inc designs, manufactures, and sells electric vehicles in the People's Republic of China. The company is also involved in the manufacture of e-powertrain, battery packs, and components; and racing management, technology development, and sales and after-sales management activities. In addition, it offers power solutions for battery charging needs; and other value-added services.
Read More - Current Price
- $4.65
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $5.91 (27.1% Upside)
#3 - Li Auto (NASDAQ:LI)
The last of the Chinese EV manufacturers on our list is Li Auto (NASDAQ: LI). For electric vehicles to achieve mainstream adoption, they have to address the needs of all drivers. That’s one reason to like LI stock. The company focuses on electric sport utility vehicles (SUVs). Many companies have come to market with sedans, but this is a niche that is beginning to gain popularity in China.
That was evident in the company’s July delivery report in which it reported 8,590 deliveries. That marked a YoY gain of approximately 250% and a gain of over 11% from the prior month. That total also marked the first time the company has crossed the 8,000 delivery milestone.
LI stock tumbled at the beginning of the year, but has since made up nearly all of its losses. The stock is trading significantly below its 52-week high. However, analysts give the stock a 12-month price target of $38.72 which would be a 22.7% upside from its current level.
About Li Auto
Li Auto Inc operates in the energy vehicle market in the People's Republic of China. It designs, develops, manufactures, and sells premium smart electric vehicles. The company's product line comprises MPVs and sport utility vehicles. It offers sales and after sales management, and technology development and corporate management services, as well as purchases manufacturing equipment.
Read More - Current Price
- $22.78
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 4 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $33.94 (49.0% Upside)
#4 - Tesla (NASDAQ:TSLA)
It has to be tough to be a Tesla (NASDAQ: TSLA) investor these days. TSLA stock formed a bearish death cross in mid-July. Its 50-day moving average crossed below its 200-day moving average. However, when the company delivered a strong earnings report, at least in terms of the bottom line, the moving averages have not reversed…yet. And that’s despite the stock having moved 8% higher since the report was released.
If you believe in the long-term story of Tesla then you shouldn’t be too concerned about what may just be a momentary technical glitch. Still, it’s a reminder that TSLA stock has been lifted higher based on a lot of FOMO. And if the view of analysts means anything it could be a rough ride for the rest of 2021 for Tesla investors.
Tesla is also a player in the Chinese market. The company does not report Chinese deliveries, but with other EV companies posting strong delivery numbers it’s likely that the pie is big enough to include Tesla.
About Tesla
Tesla, Inc designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits; and non-warranty after-sales vehicle, used vehicles, body shop and parts, supercharging, retail merchandise, and vehicle insurance services.
Read More - Current Price
- $342.03
- Consensus Rating
- Hold
- Ratings Breakdown
- 14 Buy Ratings, 16 Hold Ratings, 9 Sell Ratings.
- Consensus Price Target
- $230.18 (32.7% Downside)
#5 - Ford (NYSE:F)
If I asked if you would be interested in a stock that’s climbed 60% in 2021, would you be interested? I bet you would. So even though it’s not one of the new kids on the block, if you’re looking to invest in EV stocks, Ford (NYSE: F)deserves strong consideration.
The company’s stock is getting a boost from an executive order signed by President Biden that calls for 50% of new car sales to be electric by 2030. The order, which is more of a request, is part of the Biden administration’s broader clean energy and infrastructure initiative.
Still, as one of the “Big Three,” Ford stands to benefit from this initiative. In fact, the company issued its own statement in which it said it is well-positioned to ensure that electric vehicles make up 40% to 50% of its U.S. sales by 2030.
Analysts project F stock to climb an additional 7% from current levels over the next 12 months.
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)
#6 - Blink Charging (NASDAQ:BLNK)
Electric vehicle adoption is becoming a chicken and egg question. In order for EV’s to overtake the internal combustion engine vehicles of today, there has to be a way to charge them. Even the longest-lasting battery won’t solve all of those problems.
That’s where a company like Blink Charging (NASDAQ: BLNK) comes into the picture. Blink manufactures charging equipment for residential and commercial uses. BLNK stock soared in early 2021 on high hopes of an infrastructure bill. Those hopes were dashed as getting a bill passed through Congress has been delayed.
But with an infrastructure bill likely, and with President Biden continuing to put the pressure on automakers to develop electric vehicles, this could be a good time for opportunistic investors to buy BLNK stock at its current price.
Analysts see the stock climbing an additional 6% from current levels. However, that could move higher after the company reports earnings in August.
About Blink Charging
Blink Charging Co, through its subsidiaries, owns, operates, manufactures, and provides electric vehicle (EV) charging equipment and networked EV charging services in the United States and internationally. The company offers residential and commercial EV charging equipment that enable EV drivers to recharge at various location types.
Read More - Current Price
- $1.54
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $5.64 (267.6% Upside)
#7 - Lucid Motors (NASDAQ:LCID)
The last two stocks on this list are best left to speculative investors with a high-risk tolerance. That’s because neither of these companies currently has a product in the market. The first of the two companies is Lucid Motors (NASDAQ: LCID).
Lucid is among the most hyped EV stocks of 2021. One reason for that is that it is currently one of the most well-capitalized companies in the sector. However, in its first weeks of trading, LCID stock is finding there to be a healthy amount of skepticism. Some of which is because the company came forward via a special purpose acquisition company (SPAC).
Still, there’s a lot of hype built into LCID stock and it’s up to the company to deliver. It claims that it is still on schedule to begin production of its first vehicle, the Lucid Air, in late 2021. If they do, this stock will look like an absolute steal at $22.75.
About Lucid Group
Lucid Group, Inc a technology company, designs, engineers, manufactures, and sells electric vehicles (EV), EV powertrains, and battery systems. It also designs and develops proprietary software in-house for Lucid vehicles. The company sells vehicles directly to consumers through its retail sales network and direct online sales, including Lucid Financial Services.
Read More - Current Price
- $2.03
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $3.16 (55.4% Upside)
#8 - Fisker (NYSE:FSR)
The last stock on our list is perhaps the most speculative. Fisker (NYSE:FSR) is spearheaded by Henrik Fisker. The company is planning to launch its first vehicle, the Ocean in late 2022. The company currently has approximately 17,300 reservations which require a $250 non-binding deposit.
Fisker recently signed an agreement with Magna International (NYSE: MGA) to manufacture the Ocean at Magna’s facilities in Graz, Austria. If the Ocean launches as scheduled, the $37,499 vehicle will also be available via a month-to-month lease.
The company also recently pledged $10 million to support the expansion of vehicle charging in Europe. The investment will ensure that Fisker can provide its customers with one year of free charging on the company’s (Allego) network.
Like Lucid, Fisker doesn’t yet have a vehicle in production and there’s a lot that can go wrong. And to be fair, short interest remains uncomfortably high at over 22% as of mid-July. Still, it appears that institutional investors are warming up to Fisker and that may lend itself to more realistic price discovery
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)
The global shortage in semiconductor chips has weighed down some of the top EV stocks in 2021. While that situation will continue to weigh on stocks for several quarters if not a full year of earnings, it’s not a forever situation.
EV companies stand to make billions, if not trillions, in revenue. And industry analysts note that the sector could grow at a compound annual growth rate (CAGR) between 35% to 45% for the next two to three decades.
That’s right, decades. That’s a big opportunity for the right investors. Investors with foresight, who have the stomach to ride out some volatility.
However, like many sectors, quality matters. The names that are on this list today may not have been here six months ago. And six months from now, there may be other companies that rise to prominence.
Your goal as an investor is to reward the manufacturers who deliver on their promises and reward you as a shareholder. The companies in this presentation are likely to do just that.
More Investing Slideshows:
