Top EV Stocks
The world is going through the unprecedented boom of EV industry. It is obvious that e-vehicle stocks are attracting investors' attention. We've made the list of top e-car companies to consider. Some are pure-play EV manufacturers, while others are component suppliers or traditional car makers that try to keep in line.
The Best EV Stocks to Invest In
The EV industry consists of e-car, e-truck, e-van, commercial EV manufacturers and suppliers of power components and services for e-vehicles. The industry is new and fast-growing. Everybody knows giants like Tesla. However, most of EV makers are not so widely known to investors.
The e-vehicle industry is too young, so there're no benchmark indices reflecting how well EV stocks perform. Investors can compare their performance to one-year trailing return of Russell 1000 Index (most of the data in the article is as of Sep 2020).
In the current year, the firms engaged in pharmacy and biotechnology are booming unprecedentedly due to the racing for vaccine against COVID-19. EV stocks are another sector flourishing in 2020.
It is high time to shift to e-cars. Better batteries provide longer driving range, which makes e-vehicles much more practical. The infrastructure of EV recharging stations is expanding. Due to reduction of expenses on fuels and services, the costs of owning EVs reduce. Besides, with the global climate crisis, eco-friendliness of e-cars is becoming more and more crucial.
What's happening with e-car stocks today has never been known before. Even TSLA's stock is not regarded as speculative compared to the sector standard. All of this makes one recollect the dot-com bubble of 1990s.
Nowadays, technology firms generate much more profit compared to their forerunners of the 1990s, except for EV stocks, the majority of which do not bring any profit to investors yet. Those who invest in e-vehicle stocks now expect to profit in the long-term when the globe shifts from conventional cars toward battery-powered vehicles. And this hopes are quite reasonable as the market is growing extremely fast. Fossil fuel cars are sinking into oblivion, while green vehicles are the promising future of transport.
Today, approximately every fortieth car is e-vehicle. The figure is growing year by year, and in a decade at least one fifth of new cars sold are expected to be battery-powered. Talking about short-term prospects, next year the volume of EV sales is forecast to grow by 36 percent and EV stocks are supposed to gain 30 percent.
Manufacturers of gas-powered vehicles take efforts to keep their business in line. Almost all large car companies are entering the EV market by producing fully-electric or hybrid cars, even though the price of petrol is dropping. The key incumbents gradually shifting toward cleaner drivetrain are General Motors, Ford and Volkswagen.
Below, we consider the top e-vehicle stocks that can help you benefit from the current industry boom. There are some pure-play e-car makers on the list, while the rest are suppliers of power equipment or manufacturers of traditional vehicles starting the transition to zero-emission cars. You shouldn't consider this listing as a must-invest, because not all stocks will be the right choice for every investor. All of the EV stocks are extremely speculative, that is why only investors with higher risk tolerance should buy them. Anyway, all of the stocks listed attract interest of investors today.
NIO Inc (NIO)
The so-called “Chinese Tesla” is a leader among e-car stocks with the most momentum. Its total return over the last twelve months is 1,260 percent, which is more than 1.5 times bigger than that of the second top momentum stock – Tesla. The Chinese leading EV manufacturer also comes second among best-value (P/E ratio of 15.9) and fastest-growing (EPS growth of 137.2 percent) e-vehicle stocks.
NIO's share price constitutes 21.22 dollar, market capitalization is 25.9bln USD.
The firm specializes on building and selling EVs and parts, at the same time offering various battery-services like recharging and swap.
The previous year was unfavorable for NIO. A bunch of negative factors led NIO's stock to fall down to 1.19 USD in October, 2019.
The current year is, on the contrary, a year of success for the firm. In the first autumn month, the company supplied the record-breaking number of EVs – over 4.7 thousand. The firm has launched its newest premium coupe SUV model. The manufacturer's margins are growing, and losses are decreasing.
NIO's position is still risky because of COVID-19. However, its stock is currently 370 percent up.
The company seems to have a bright future, because China is interested in lowering its energy imports and shifting toward e-vehicles to save the Chinese cities from air pollution. Before the pandemic outbreak, China's government planned to have 60 percent of vehicles in the country electric in fifteen years from now.
Anyway, investors have to be cautious, since China's stocks are not very reputable. NIO has an extremely high D/E ratio – 9.3.
Tesla Inc (TSLA)
It is impossible to exclude Tesla from any list of EV stocks, as this is the global leader of automaking. Tesla has impacted the EV market more than any other firm. The e-vehicles produced before Tesla did not attract drivers, as they were ugly and not powerful enough.
TSLA ranks second among top momentum EV stocks (790.5 percent return) and third among EV stocks with the lowest price/sales ratio (16.1). It has a market capitalization of 400.5bln USD and share price of 429.01USD.
The corporation is a designer, builder and seller of e-vehicles and EV powertrain components. E-cars are sold to drivers, while parts are purchased by other car makers. During the third quarter of the current year, the automaker manufactured more than 145 thousand EVs and sold 140 thousand.
TSLA's stock is nearly 500 percent up this year, which makes the whole EV sector to boost.
Throughout years, TSLA was losing. Today, it is turning profits. Tesla is not only producing unprecedented quantities of EVs. It is also spreading around the world, having put its China-based Gigafactory into operation, expanding into more European countries and entering Latin American countries.
The drawback of TSLA's stock for investors is that it is too high-valued. Moreover, who knows for how long it will continue growing so fast.
Investors value TSLA not as an automaker, but rather as a successful technology upstart. It is quite understandable, because Tesla is a leader of battery tech and self-driving. Anyway, Tesla's stock is high-priced even for technology companies.
The booming EV market is likely to continue raising revenue and profit of Tesla, as well as its share price.
Kandi Technologies Group (KNDI)
The Chinese company is the winner among the best-value EV stocks, which is the stocks that have the lowest twelve-month trailing Price/Sales ratio. This ratio means the sum paid for stocks for every USD of sales.
KNDI's stock price is 6.2 US dollars, market capitalization constitutes 0.3bln USD, while price to sales ratio is 2.7 (which is over 3 times lower compared to its closest rivals – NIO and Tesla).
The company is a developer, manufacturer and commercializer of e-vehicles and quads, as well as EV parts (such as battery-packs, car engines, air conditioning units, and EV controllers). For the last seven years, the firm has been mostly focused on developing all-electric vehicles, concentrating on expansion of its domestic market-share. In early autumn, Kandi established a sub-company 100% owned by the parent company – China Battery Exchange Technology (a battery swapper and recycler).
During its early years, Kandi was leading the Chinese e-vehicle market. At that time, battery-swapping was a must because electric vehicles were charging too slowly and their range was too short.
Nowadays, with the tech improvement, lots of countries have rejected the battery swap. However, China is still utilizing this model and extending it throughout the country, standardizing the batteries. The battery swapping models are relatively cheap because the drivers do not have to purchase the batts – only to rent them. This reduces the price of e-vehicles considerably and brings China closer to its sustainability ambitions.
Thus, the key tech of Kandi is becoming popular in its native land again, which is likely to bring KNDI's stock up.
Workhorse Group (WKHS)
The Ohio-located company has the highest YOY growth among EV stocks – 1,570%, which is over ten times more than the second-fastest growing stock – NIO. Besides, the firm is in top 3 momentum stocks, with total returns of 622.3% (compare to Russell 1000 index – 18.3 percent).
Workhorse's market capitalization is 2.7bln USD, stock price is 25.28 dollars.
The American corporation stands out from the rest of EV companies listed, as it is not oriented for consumer market. The firm focuses on designing and manufacturing of electric delivery vans. In early autumn, Workhorse revealed the driving range improvement of its pure electric delivery truck C-Series. The C-1000 model has set a record in the sector – about 160mi/charge (in urban conditions).
The delivery sector is high-promising in terms of profit. Two years ago, UPS ordered 950 electric delivery vehicles from Workhorse. UPS is expected to save 170 thousand USD per truck within twenty years due to fuel and maintenance cost reduction.
Besides, Workhorse is among 3 winning bidders for USPS's 6bln-dollar contract for 180 thousand delivery trucks.
The company is also present in the consumer market by owning 10 percent of Lordstown Motors Corp.
WKHS's share price jumped up in mid-summer and is still around its maximum. For now, it is 495 percent up in the current year.
The company's track record traces back to 1998. During its early years, the firm converted delivery trucks manufactured by other companies. However, five years ago it shifted to producing its own vehicles.
Delivery became a profitable business due to COVID outbreak and it is not going to fade in the near future.
However, Workhorse's anticipated sales volumes sound a little bit strange. The company is planning to supply only 400 vehicles in 2020.
WKHS's stock price is projected to rise from 12 to 27USD. Anyway, investors should take care while buying pure electric vehicle stocks.
Blink Charging (BLNK)
Blink Charging Co is in the top 3 of EV stocks with the highest earnings-per-share growth (over the latest quarter) – 119.7 percent, yielding only to WKHS and NIO.
The company's price per share is 10.31USD, it has a market capitalization of 0.326bln USD.
The firm provides recharging equipment for e-vehicles as well as charge services. It offers a patented network of cloud based SW, operating, maintaining and tracking all of Blink's recharging points as well as the related charge data.
Nikola Motors (NKLA)
NKLA is the freshest EV stock on the list. It attracted investors' attention at the beginning of summer this year after a reverse merger. In just a few days, its price rose from 30 to 90USD per share. Another sharp rise was in late summer after Nikola's entering into agreement for delivering 2.5 thousand battery-powered trash trucks. Since then, NKLA's stock has dropped down a little, but it is anyway more than 295 percent up this year.
A couple of months earlier, the firm announced the Badger – an electric pick-up with a hydrogen transmission option, which increases its range up to 600mi.
The company is often referred to as 'Tesla of Truck'. It is a manufacturer of next gen e-trucks that emit no carbon and are cost-efficient. Nikola's intentions are extending throughout commercial and consumer markets via its hydrogen-powered and electric delivery vans and pickups, correspondingly.
The firm is currently constructing an Arizona-based factory worth 600mln USD for manufacturing road trains.
NKLA is among top e-vehicle stocks to invest in for the nearest decade, and the firm has a good chance to become worth 100bln-USD someday.
The company is not an e-vehicle maker, but it's a major manufacturer of essential parts for EVs, such as high voltage cables, charger cords, electric safety devices, and active coolers for monitoring and dissipating of the heat obtained from high voltage charge.
Aptiv's stock suffered a lot from the COVID-19 pandemic and has not entirely recovered from the shock so far. As of September 1, the price per share was 86USD, which is 9 percent lower compared to early 2020.
In case e-vehicle sale matches the optimistic expectations of the market for e-car manufacturers, it will grow the demand for the EV components produced by Aptiv. This is expected to pay off for the company's shareholders.
The prerequisite for any e-car is battery. That is why Panasonic is among top EV stocks to invest in. The corporation is the world's leading manufacturer of lithium ion batts that power all-electric vehicles, hybrids and PHEVs.
The company cooperates with Toyota and Tesla, manufacturing batts for their e-vehicles. In Feb 2020, the battery maker published report on the Q1 profit from its joint venture with Tesla. The manufacturing volumes are growing, consequently the price of materials is expected to fall, which would help making the business still more profitable.
Like for the above stock, the March's pandemic was unfavorable for Panasonic's shares. It is now in the process of recovering, however the stock is still traded lower than in the beginning of the year.
General Motors (GM)
The Detroit-based colossus is among Top 3 American automotive manufacturers who are currently making efforts to survive. General Motors is not really a car maker, since today it mostly concentrates on producing sport utility vehicles and gas guzzlers.
The US's corporation pioneered the e-vehicle market back in 1996 when it launched its EV1. Later the company was accused of killing the vehicle.
Nowadays, GM is coming back to EV industry. Its Chevrolet Bolt has gained popularity among U.S. e-car drivers. Previously in 2020, the firm announced its Ultium EV platform. The company is planning to create twenty electric cars based on the platform, which uses an exclusive batt packs that charge fast and have a range of 400mi per charge.
What should attract investors' attention is General Motors' possibility to develop its e-vehicle business. In the middle of August 2020, one of DB analysts assumed that if the company expands its share of e-car market, its stock can grow up to 93USD. Even though the stock was traded at about 30USD in September, this suggestion predicts large growth for the company's stock.
All of this makes GM an attractive e-vehicle stock to invest in, although most electric car makers consider the corporation to be a manufacturer of conventional vehicles and hope to leave it behind.
General Motors became interesting for lots of those who invest in automobile companies after announcing about its cooperation with e-truck upstart Nikola. In fact, the American giant is planning to finally fully shift toward EV market, allocating lots of money and resources in the industry, which has made it attractive for Nikola.
In cooperation with Korea's battery manufacturing leader LG Chem, GM is constructing an Ohio-based batt plant from nothing. Besides, the company has created an innovative, very flexible EV architecture, which is going to support a broad choice of fresh e-cars within two or three years. Moreover, General Motors is launching a multitude of EVs in China, being among the nation's top car suppliers.
Badger by Nikola will be powered by GM's Ultium. Plus, lots of the company's own e-pickups are supposed to be produced within the following couple of years.
By the way, General Motors is expecting every new coming EV to bring profit from the very beginning.
It is quite understandable that the global transition toward e-cars will lead to ups and downs among automotive manufacturers. However, General Motors have done the big job to appear among those who will succeed, and its contract with Nikola proves this.
The German vehicle manufacturer produces 11mln units annually, which is 89 percent more compared to Ford and 24 percent more in comparison with General Motors. Thus, it is quite clear that the corporation will gain profit from the forthcoming e-car boom. Large volume of production allows keeping the low cost and competitive prices.
For the time being, only around one hundredth of all the carriers made by VW are EVs. However, the company invests huge amounts of money into its transition to e-vehicle maker. In 2020, it is allocating 2.3bln USD into China-based e-car makers and is expecting to sell 3mln EVs by 2025.
In 2019, the automaker announced its first fully-electric car – ID.3. Its driving distance ranges between 205-341mi per charge, depending on the battery capacity. This takes the vehicle a step forward compared to e-cars with shorter ranges (such as Leaf by Nissan) and a par with Y, X, III and S series of EVs by Tesla.
By the way, E.Musk has test-driven the ID.3 and has concluded that the vehicle is quite good provided it is not a sports car.
Taking into account that VWAGY's P/E ratio is lower than 14 and dividend-price ratio is as generous as 4.3 percent, it is worth while considering VW's stock as an investment option.
Ford Motor Company (F)
In mid-spring 2019, Ford unveiled it was planning to cooperate with Rivian Automotive in building e-SUVs and e-pickups. Ford Motor allocated a minority investment of 500mln USD in Rivian. The partners are working on co-development of Ford's new EV based on the platform by Rivian. Ford is likely to profit from production of electric pickup trucks and this cooperation is turning its former competitor to partner.
Besides, Ford is going to invest 11bln USD within two years in the production of a series of EVs, such as ZEV version of the F-150 (e-SUV inspired by sporty Mustangs) and battery-powered version of its commercial-van top seller Transit.
The e-version of F-150 is being developed and is expected to be launched in the middle of 2022. The manufacturer promises to introduce a self-driving system in the new vehicle, showing its internal SW development skill.
Obviously, not every investment is going to work. Thus, four years ago, Ford invested in the acquisition of San Francisco's commuter ridesharing service – Chariot. However, the latter stopped its business three years later. The rest of Ford's investments (like the acquisition of Quantum Signal that focuses on mobile robots) have not shown yet whether they are successful.
Anyway, even in case the automotive giant's initiatives with new techs do not succeed 100%, Ford's efforts with internal investments and betting on upstarts with specific focus will keep the century old firm in line with the new technologies marking the automotive industry.
The company's market value is estimated as 174.2mln USD, its price per share is 5.75USD (as of September, 2020).
The Oregon's EV manufacturer stands out from the rest of automakers on the list. It focuses on making 3-wheel e-vehicles, such as its Fun Utility Vehicle. The EV is compact-sized, relatively cheap and very nimble. It can drive legally on highways and can handle such daily tasks as commuter ride sharing and driving for purchase or delivery tasks. FUV is expected to be a next-gen all-terrain vehicle.
Other Arcimoto's products include Rapid Responder and Deliverator. The former will be used in security, emergency and law-enforcement for quicker and more affordable responding to accidents. The latter is meant for delivering goods, which optimizes last-mile delivery by means of cost-reduction and speed-improvement.
The automaker began selling FUVs about a year ago. Manufacturing of its commercial vehicles was planned to start at the end of the current year.
One of Arcimoto's attractions is that the company is not a direct competitor of Tesla dealing with more traditional EVs. The company's future seems to be very promising both in commercial and consumer sectors.
FUV's stock looks very lively, having raised by 480 percent compared to the March's lowest level.
Electrameccanica Vehicles Corp (SOLO)
The small-cap Canadian company's market capitalization is 215.4mln USD, its share price is 3.36USD and its full time staff is 63 persons (as of September, 2020).
Investing in SOLO, you rather invest in the concept.
The firm's vehicles are sold under brand Solo and they are 3-wheeled 1-seat cars resembling carts rather than passenger EVs. However, such vehicles produce minimum emissions.
In 2018, Electrameccanica started trading on NASDAQ. Ever since, its trading path has been rocky. Most of the time, the stock price was lowering until its sharp jump in late spring of the current year. As of Sep 2020, the stock was traded at about 270 percent higher compared to its 52 week low.
Just like the majority of the stocks listed, SOLO is not profitable so far. It has some interest for investors, but still the risk is high.
Different Options of Investment in EV Stocks
If you don't want to purchase shares of the companies who focus on the production of electric vehicles, there are four other opportunities to benefit from the boom of EV industry.
Investing in electric car parts
One way to invest in e-vehicle industry is buying the stock of firms that supply power components for EV manufacturers.
Among the leaders of this sector is Aptiv, which we've mentioned above.
One more stock worth your attention is French Valeo (VLEEY, FR). The firm has deep connection with Europe's major car manufacturers. In the United States, it is traded as a penny stock, and the trading volumes are comparatively low. So, Valeo's share is not as easily traded and followed as APTV.
Though component supplies are rather uncertain due to big debt-load and low margin, they are less volatile in the long-term because they do not depend much on success of the final product.
To put it differently, even if Tesla no longer dominates the market, original equipment makers will be essential for the industry anyway.
Investing in batteries
Batteries are probably the main component of any EV, providing most of its cost and performance. Thus, it would be reasonable to purchase stock of the world's biggest supplier of Li batts – Panasonic. Though in the United States, Japan's giant is traded for less than 5USD, its ADTV is about 100 thousand, offering sufficient liquidity.
One more global leader of battery manufacturing is BYD (BYDDF) – the closest one to China's market. It is an aggressive stock, however less visible for investors from the West.
Investing in lithium
Another option to consider is investing in the Li, which EV batts are made of. In this case, you do not depend on a supplier. The only factor that matters is that the car is battery-powered.
It is admitted that stock price of Li mining companies have been hit significantly within the last couple of years. However, even though large-cap Albelmarle (ALB) stock price was twice lower in September 2019 compared to its 2017 high, the firm was making comfortable profit and its single digit P/E ratio was rather attractive at that time.
One more big player in Li mining is Chilean SQM. As of Sep 2019, its dividend constituted about 4.3 percent. However, this is a risky option since its dividend payment during twelve month exceeded the expected EPS.
Investing in all of it
In case you would like to go beyond individual car manufacturers but don't want to invest in power components, batts or Li, you may be interested in buying stocks of the whole sector through ETFs.
There're no exchange traded funds that focus exclusively on e-vehicles. However, some funds are investing in emerging trends of the auto industry – for example, Global X Autonomous & Electric Vehicles ETF (DRIV). Its portfolio consists of companies involved in e-car parts and batt materials (like Co and Li), technology giants, such as Alphabet (GOOGL, GOOG) that invest in autonomous driving techs, and traditional car manufacturers, for example Toyota (TM) which are mostly focused on the production of conventional gasoline vehicles. However, the ETF is rather young and its AUM is not so large.
The KraneShares Electric Vehicles & Future Mobility ETF (KARS) is somewhat bigger and has a longer track record. Its portfolio includes General Motors and such technology companies as chip-making Nvidia (NVDA).
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