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.
(Updated 01 May 2022)
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.
Decades ago, complete conversion to electric vehicles was considered an impossible dream to achieve; however, in the recent years many countries, particularly developed countries are emphasizing and encouraging other developing countries to resort to opting for eco-friendly solutions. 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. This ethical revolution has led to an increased demand for electrical vehicles instead of fuel-based vehicles. In addition to this, rise in the price of petroleum is also a contributing factor to opting for EVs. Not only is full conversion to EV is highly desirable, but fuel-based vehicles are anticipated to become obsolete, which is why companies are now working tremendously hard to cater to this future demand. Therefore, speculations suggests that investments in the EV industry is bound to bring in significant returns to investors; considering 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.
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.
As mentioned, car companies are now more interested in producing eco-friendly, zero emission products, these include full-electric, hybrid cars, and domestic and commercial vehicles as well. This article will provide information regarding these EV companies that have stocks worthy of your investment. However, it is important to know that stocks are tricky as day-to-day events can influence the value of a company’s stock, so one must be fully informed about the company and its activity to make the most of its stocks and to secure themselves of possible risks.
Firstly, we present brief information about some terms that indicate the whether a stock is a good or poor investment.
Price to Sales (P/S) Ratio:
P/S ratio is usually used while comparing different company stocks within a particular industry. Price to Sales ratio is the willingness of investors to pay for the company’s per dollar sale, and is used to interpret the valuation of a company’s stock. A lower ratio suggests that the stocks are undervalued, while a higher one would suggest overvaluation. The P/S ratio is easily computed by dividing the price of stocks by the sales generated by each stock.
Revenue Growth is simply the change in revenue or sales over a period of time. The higher the revenue growth- the better the expected future performance of a company and the corresponding increase in investment returns.
Earnings Per Share (EPS) Ratio:
As the name suggests, earnings per share ratio indicates the earnings or profits generated by a single share of stock. In addition to P/S ratio, EPS is also an important indicator of a company’s performance as it shows how well the stock investments are utilized to generate higher earnings. A higher EPS depicts that a single dollar investment brings profit greater than a dollar and vice versa. Investors are attracted to high EPS companies as they bring higher profits.
Total return is literally the company’s investment returns to its investors. Total returns can be in a variety of forms, i.e., dividends, interest (bond) payments, capital appreciation. Generally stated in the form of percentage of original investment, the total return shows the earnings of an investor. As higher earnings are desirable, investors opt to invest in companies that have a high total return.
The companies mentioned below are among the EV companies that have attractive stocks.
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 company’s bright and powerful corporate image has contributed enormously to its stock price. Investor’s 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 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. The company most popular and hyped vehicles are the model 3 and S Sedans, and crossovers model X and Y.
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. The current price at which TESLA stocks are sold at are as high as $753.6 (a massive 750% increase). However, due to the high price of the share, it is less liquid in comparison to others, which can be observed by the average number of TESLA shares trades (19.4 million).
On another note, TESLA has a, EPS ratio of 1.90- which is relatively a high earning rate given the dollar stock price. This can also be seen by the revenue per share of $43.81. Although it is important to note that the quarterly revenue growth of 98% is high but ranks second compared to NIO.
However, with a P/S ratio of 18.03, the company stocks are significantly overvalued. Any sudden internal or external issue could possibly burst this inflated valuation, resulting in serious damage to investors and the company itself. Yet so far, the booming EV market is likely to continue raising revenue and profit of Tesla, as well as its share price.
NIO Inc (NIO)
Regarded as the “Chinese Tesla”, NIO is a leading company from China. Its most popular and successful vehicles include the SUVs and Crossovers. The manufacturer's margins are growing, and losses are decreasing. Furthermore, the firm specializes on building and selling EVs and parts, at the same time offering various battery-services like recharging and swap.
Although in the year 2020, the company (like many others) was hard hit by the pandemic, however it has now successfully returned back to its great performance. 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.
Currently, NIO’s single stock share has a price of $36, this price has been considerable stable over the past few months. Furthermore, what is interesting is that it has a total market capitalization of $59 Billion, and has an average share transaction of 50 million. This high number shows that the stock shares are quite liquid and can easy be sold off to other buyers.
The company has an impressive quarterly revenue growth of approximately 127%, with a total revenue of $27.6 Billion and a per share revenue of $19.18. With a P/S ratio of 2.14 , the shares are said to be undervalued.
XPeng Inc. (XPEV)
Xpeng is another major player in the EV market in China. The company was found in 2015 by three people namely. Tao He, Heng Xia and finally Xiao Peng Hi. The company’s purpose is to bring in environmentally friendly and sustainable products into the market.
The company was performing well, generating total revenues up to $11.55 Billion ttm (around 117.9% of its investments), with this revenue, each share received around $16.9.
However, very recently the company revealed it goal to create “flying vehicles for city use”, and since then, the company has faced backlash in terms of its stock price. Investors who were unsure of the project started pulling out their money leading to a decreased stock price of $35.4. The company still has great potential with over 500% quarterly revenue growth rate and an expected 1-year price of $53.
NISSAN MOTOR CO
KraneShares Electric Vehicle and Future Mobility ETF (KARS)
Li Auto Inc. (Li)
Li Auto is another Chinese originated EV company that deals with the designing, manufacturing and sale of these EVs. The company came into being in the year 2015.
The company was doing well for the past few years, however recently it faced a downfall in its stocks. This happened as a result of failing to meet the manufacturing expectations; an 25000 to 26000 vehicles manufactures were expected, but only 24000 were developed. This happened due to the semiconductor shortage in China. This led to 6% decrease in stock prices in mid-September 2021- however, the company recovered elegantly with currently $27 per stock. The company has large revenues of 15.27 billion Dollars ($18.54 per share) and a quarterly revenue growth of 158.8%, these numbers suggests that the company still has a lot to offer to its investors.
Kandi Technologies Group (KNDI)
The Chinese company is the winner among the best-value EV stocks, which is the stocks that have a low twelve-month trailing Price/Sales ratio (3.53). This ratio means the sum paid for stocks for every USD of sales.
KNDI's current stock price is 4.47 US dollars, this price has been unstable and shows a decreasing trend. The market capitalization constitutes 342.839M USD, while price to sales ratio is 3.53 (which is over 5 times lower compared to its rival – 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 which is over ten times more than the second-fastest growing stock – NIO. Besides, the firm is in top 3 momentum stocks, with high revenue growth of 1,210%. (compare to Russell 1000 index – 18.3 percent).
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 was expected to save 170 thousand USD per truck within twenty years due to fuel and maintenance cost reduction.
Besides, Workhorse was among 3 winning bidders for USPS's 6bln-dollar contract for 180 thousand delivery trucks.
However currently the Workhorse's market capitalization is 970.352M USD, stock price is 7.84 dollars. The low stock price can largely be attributed to the lawsuit dropped by the company Workhorse against USPS over the mail truck contract.
WKHS's stock price is projected to rise from 7.8 to 18 USD. Anyway, investors should take care while buying pure electric vehicle stocks.
Blink Charging (BLNK)
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.
The company's price per share is 29.20USD, it has a market capitalization of 1.231BUSD. The company has a high total revenue of 9.95Million Dollars with a quarterly revenue growth of 176.90% and a ttm revenue growth of 381.1%.
Nikola Motors (NKLA)
NKLA was the freshest EV stock in the year 2020. 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.
The company was once referred to as 'Tesla of Truck'. It was supposed to be a manufacturer of next gen e-trucks that emit no carbon and are cost-efficient. Nikola's intentions were to extending throughout commercial and consumer markets via its hydrogen-powered and electric delivery vans and pickups, correspondingly.
Although the company is relatively new in the industry, the company is already involved in disputes leading to a horrible brand image. The founder of the company Trevor Milton was engaged in direct feuds with Elon Musk- the CEO of TESLA, accusing the former of committing fraud. This online twitter feud proved to be the doom of Nikola. Since the incident, the company stocks crumpled from $80 a stock to a mere $11.
The company that once had so much to offer, became one that has the most risk. Currently, the stock price is predicted to rise from $11 to $15. Yet no one is certain of positive returns from the company.
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 24th, the price per share was 152USD, although this year the company’s stock price fluctuated a lot, it maintained a good price range of 83.54 - 170.47 USD in the past 52 weeks. The company also has an impressive EPS ratio (3.67), P/S ratio (2.63) and a high revenue per share (58.13) in the EV industry.
All these indicators show that Aptiv have stocks that provide good returns to its investors. Furthermore, the company also has a remarkable 94% quarterly revenue growth rate.
In case e-vehicle sales 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. However, the company currently has the highest total revenue of 7.1 trillion Dollars with a revenue per share of approximately 3000 Dollars.
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.
The company's market value is estimated as 449.455M, its price per share is 12.04 USD (as of 24 September, 2021).
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 1116 percent compared to the March's lowest level.
Electrameccanica Vehicles Corp (SOLO)
The small-cap Canadian company's market capitalization is 395.64M USD, its share price is 3.5 USD and its full-time staff is 63 persons (as of September, 2021).
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 2021, the stock was traded at about 52 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. However, the company is still popular among its investors due to its high revenue growth of 2,380% this year. This increases the confidence among the investors that the company could perform better in the future.
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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