An array of electric vehicle companies went public last year, which propelled the valuation of electric vehicle stocks to new highs. Though these companies are far from generating profits, they represent a way for investors to wager on the future of transportation.
EV companies have attracted widespread customer interest, suggesting that they aren’t too far from turning a profit.
The current Russia/Ukraine war has thrown the spotlight on alternative energy sources. Oil and gas prices have been soaring over the past few months, and even the traditionalists are thinking about the inevitability of EVs.
Nevertheless, the recent stock market downturn has cleared out a lot of the frothiness in EV valuations. Most electric vehicle stocks has dropped vigorously, providing attractive entry points.
Let’s look at seven of the most promising electric vehicle stocks in the article.
Electric Vehicle Stocks: Nio (NIO)
Nio (NYSE:NIO) is one of the leading Chinese companies that has experienced massive growth over the past few years. It recently delivered its 200,000th vehicle and has made its way into the European market.
The company’s latest delivery card disappointed investors, but the lackluster result was largely expected. Automotive manufacturers have been hit hard by the recent Covid-19 led disruptions in China.
However, if we look at the bigger picture, Nio has done remarkably well in growing deliveries and sales aggressively each quarter.
Nio has big plans to spread its tentacles in Europe. It already made its way in the Norwegian market with its ES8 SUV last year.
According to the International Energy Agency, China and Europe will likely be two dominant EV markets by 2030. As the company expands its product line and geographical outreach, it has set itself up for monstrous growth in the future. Hence, despite the risks, NIO stock remains an attractive EV play.
Ford (NYSE:F) is an auto-titan that has been in the business for over a century. It now plans to make a big splash in the burgeoning EV arena, challenging the industry’s stalwarts.
Ford plans to ramp on spending on its hybrid and electric cars to a whopping $50 billion, up to $20 billion from previous estimates. Moreover, it will be splitting up its business into separate units.
Its strategy can effectively maximize cash flows from its legacy auto manufacturing operations and use it to expand its EV business. Additionally, it will avoid reducing prices for its EVs by operating its fleets separately.
Also, investors will find it much simpler to value the auto-makers business based on the sum of its parts. It has the brand and scale to effectively compete with the giants of the EV space and new upstarts making waves of late.
Hence, there’s plenty to look forward to with Ford’s plans for its impeccable EV business.
ChargePoint (NYSE:CHPT) is the leading EV infrastructure stock with roughly 70% in the North American market.
Moreover, it also operates in Europe, currently operating in 16 countries in the region. Revenue from its European operations grew immensely last year, and 51,000 of its 174,000 total ports are installed in Europe.
Revenues have been growing at a brisk pace over the past several quarters. Last year, company sales rose by 65.50%, with 22.20% in gross margins. The company earns its revenues from various sources, including subscriptions, warranties, and selling chargers.
The bulk of its revenues are generated through the sale of chargers, but the contribution of other services has been increasing remarkably. CHPT stock has shed over 50% of its value in the last six months, making it significantly more attractive than in the past.
Lucid Group (LCID)
Lucid Group (NASDAQ:LCID) is an up-and-coming Chinese EV upstart making waves with its massive reservation backlog. Its recently released results show $57.7 million in sales from 360 vehicle deliveries, surpassing analyst expectations by more than $2 million.
In the same quarter last year, it made just $330,000 in sales as the quarter ended just before it commended deliveries.
Lucid targets delivery of 12,000 to 14,000 vehicles, a substantial drop from its previous estimate of 20,000 deliveries. The ongoing disruptions due to Covid-19 in China have negatively impacted production goals, but it remains confident in achieving its latest target.
On the flip side, reservations have grown to 30,000 compared to 13,000 last September. The colossal reservations number could result in a potential $2.9 billion in sales.
Moreover, it’s moving ahead with its plans to develop a facility in Saudi Arabia that will provide $3.4 billion in funds over the next 15 years to the EV maker.
Li Auto (LI)
Smart EV producer Li Auto (NASDAQ:LI) has been growing deliveries remarkably in the past couple of years.
In its first quarter this year, deliveries shot up to 31,716, up an incredible 152% from the prior-year period.
Moreover, sales of $1.51 billion beat analyst estimates by $70 million and represent a 167.50% improvement from last year. Additionally, gross margins were fantastic at 22.6%, compared to 17.3% in the first quarter of last year.
Despite an encouraging first quarter, investors were left with a sour taste with Li’s lackluster second-quarter update. Revenues are expected to fall in the $972.3 million and $1.11 billion range, well below the $1.75 billion consensus.
For obvious reasons, the Chinese EV maker expects a tough interim period, but the long-term remains with new models coming online in the upcoming quarters. Therefore, revenues are likely to rise at an exciting pace later.
QuantumScape (NYSE:QS) is a developer of solid-state batteries representing the next frontier of energy storage. These batteries are significantly denser than traditional lithium-ion batteries.
They can greatly increase an electric vehicle’s range with the same battery size. Moreover, the company expects to be producing cells for its test cars by next year and begin commercial production in 2024.
QS has nailed all its milestones for last year and successfully tested its 10-later cells. It will be working on developing multi-layered cells with several dimensions. The cells used in EVs will require multiple layers in each battery pack, and the company also has to limit its manufacturing costs. If everything is on point, the company may have an enormous market for its cells in the future.
Additionally, it collaborates with some of the major original equipment manufacturers (OEMs), including its main partner Volkswagen.
Electric Vehicle Stocks: XPeng (XPEV)
XPeng (NYSE:XPEV) is a luxury Chinese EV maker which has been doing incredibly well of late compared to its peers. Its April deliveries card showed a healthy 75% bump from the same month last year, performing significantly better than its peers.
It delivered 9,002 EVs, with its flagship P7s and P5s leading the way. In March, its deliveries surged over 200% on a year-over-year basis, and delivery and production growth slowed down considerably in April due to the new Covid-19 outbreaks.
Nevertheless, it expects to deliver a tremendous 31,000 to 34,000 EVs representing 78.2% to 95.4% delivery growth on a year-over-year basis. Supply chain disruptions and higher raw material costs are likely to be a problem, but if it can minimize these issues, XPEV stock is in for an interesting time ahead.