Sunday, February 25, 2024

Buy Alert: 7 Electric Vehicle Stocks Offering Tesla-Like Returns for Hungry Investors

HomeWARBuy Alert: 7 Electric Vehicle Stocks Offering Tesla-Like Returns for Hungry Investors

shutterstock 2204651873
Image Source : TipRanks 

Electric vehicles (EVs) are rapidly disrupting the auto industry. As countries around the world push for greener transportation to combat climate change, EV adoption is accelerating. Industry experts project global EV sales could reach 14 million by 2025, capturing 18% of the car market. By 2030, EV sales may surge 60% to over 30 million vehicles annually.

This profound shift is creating immense opportunities for investors. EV stocks have faced recent volatility, but long-term growth prospects remain strong. Here are seven top electric vehicle stocks to buy now before they take off.

Table of Contents

  • Tesla: (NASDAQ:TSLA) The Pioneer Leading the EV Revolution
  • Li Auto:(NASDAQ:LI) China’s Rising EV Star Seeing Surging Demand
  • BYD: (OTCMKTS:BYDDF) Buffett-Backed EV Maker Expanding Globally
  • Lithium Americas:(NYSE:LAC)Riding the Lithium Boom
  • Livent:(NYSE:LTHM)Major Lithium Supplier With Ford Partnership
  • ChargePoint: (NYSE:CHPT) Charging Network With First Mover Advantage
  • Qualcomm:(NASDAQ:QCOM) Semiconductor Backbone for Connected EVs

Introduction

The electric vehicle industry is entering an exciting new phase of rapid growth and disruption. As battery costs fall and charging networks expand, EVs are reaching cost parity with gas-powered cars. Government incentives and climate goals are further accelerating adoption. BloombergNEF predicts over 30% of new car sales will be electric by 2030.

Early EV pioneers like Tesla paved the way by making battery-powered cars cool. Now dozens of startups and legacy automakers are racing to capitalize on surging demand. But the EV boom requires more than just vehicles – it needs raw materials, charging infrastructure, advanced semiconductors, and innovative technologies.

Savvy investors have a chance to profit from this transition across the EV supply chain. Here are seven stocks to buy now to ride the electric vehicle wave.

Tesla: (NASDAQ:TSLA) The Pioneer Leading the EV Revolution

No list of top EV stocks is complete without Tesla (TSLA). Elon Musk’s Silicon Valley automaker single-handedly made EVs desirable and proved their mass market viability. Tesla delivered over 936,000 vehicles in 2021 and aims to grow deliveries 50% annually over the long-term.

But Tesla is much more than a car company. Its strengths in batteries, self-driving software, solar energy, and AI position it as a platform company leading multiple disruptions. Its Supercharger network provides unparalleled fast charging access. Upcoming vehicles like the Cybertruck and Semi will expand Tesla into new markets.

Tesla’s valuation has long puzzled critics focused on its auto sales. But its big ambitions in areas like autonomous taxis, insurance, and grid-scale batteries may justify its premium multiple. Ark Invest forecasts Tesla’s stock could soar to as high as $4,600 by 2026 in a bull case scenario.

While Tesla faces growing competition, its brand power and technology lead give it an edge. With rising profitability and vast growth runway ahead, TSLA remains a core holding for investors betting on the future of sustainable transport.

Li Auto: (NASDAQ:LI) China’s Rising EV Star Seeing Surging Demand

Chinese electric vehicle maker Li Auto (LI) is one of the most compelling new EV stocks to buy now. The Beijing-based company went public in 2020 and has quickly become one of China’s top-selling EV brands. Li Auto focuses on extended-range electrics that overcome range anxiety by having a small gasoline generator onboard.

>>Related  Houthi Rebels Down Another U.S. Reaper Drone Over Yemen

Li Auto delivered over 90,000 vehicles in 2021, up 177% year-over-year. Momentum accelerated in 2022, with Q2 deliveries surging 199% to 30,200. The hot-selling Li ONE SUV is the company’s sole model currently, but the new L9 full-size SUV arriving in 2022 should further boost sales.

Li Auto is also profitable, earning $0.05 per share in Q2 2022 – a rarity among young EV startups still scaling. Its gross margins topped 30% in Q2, supported by manufacturing efficiency.

Looking ahead, Li Auto expects to triple deliveries again in 2022. It finished Q2 with $8 billion in cash, providing ample capital to fund growth. Analysts see revenue climbing 95% this year and expect profits to swing positive in 2023. LI stock offers a compelling play on the booming Chinese EV market.

BYD: (OTCMKTS:BYDDF) Buffett-Backed EV Maker Expanding Globally

Chinese auto giant BYD (BYDDF) is Warren Buffett’s biggest bet on electric vehicles. Berkshire Hathaway owns 7.7% of BYD’s shares. The Shenzhen-based company manufactures a diverse lineup spanning passenger EVs, commercial vehicles, buses, batteries, and mobile phone components.

BYD delivered 641,000 electric and plug-in hybrid vehicles in 2021. EV sales momentum accelerated in 2022, with deliveries soaring 267% to 906,000 units in the first six months. BYD also achieved record monthly deliveries of 163,042 NEVs in June, pointing to surging Chinese demand.

New model launches this year like the Seal sedan and Atto 4 small SUV will provide another sales catalyst. BYD plans to expand beyond China into Europe, Southeast Asia, and Australia in 2022-2023. It’s also ramping up production capacity to meet red-hot demand.

BYD’s vertical integration in batteries gives it a cost advantage. The company will split off its battery business later this year to unlock value. With Buffett’s backing, fast growth, and ambitious global plans, BYD stock offers massive upside.

Lithium Americas: (NYSE:LAC) Riding the Lithium Boom

The transition to EVs requires mining enormous amounts of lithium and other battery minerals. Lithium prices have skyrocketed recently due to strong demand growth and constrained supply. One promising lithium miner to play this trend is Lithium Americas (LAC).

Lithium Americas is developing two world-class lithium projects: Thacker Pass in Nevada and Cauchari-Olaroz in Argentina. Thacker Pass is one of the largest known U.S. lithium deposits with resources to support a 40-year mine life. Commercial production could start in 2026, just in time for accelerating lithium demand.

Meanwhile, Cauchari-Olaroz is set to become one of the lowest cost lithium brine operations globally when it starts up in 2023. The project has an after-tax NPV of $1.5 billion and could produce 40,000 tonnes of lithium annually.

>>Related  Message to the West? Iran, Pakistan Stage Joint Naval Drills in Strait of Hormuz

Lithium Americas recently announced an all-stock merger with rival Lithium producer Millennial Lithium, expanding its resource base. As lithium demand takes off in the 2020s, LAC stock offers leverage to rising prices.

Livent: (NYSE:LTHM) Major Lithium Supplier With Ford Partnership

While Lithium Americas develops future mines, Livent Corp. (LTHM) is already a top lithium producer. The company has operated for over 70 years and has technical expertise across the lithium value chain.

Livent produces lithium used in EV batteries, consumer electronics, greases, polymers, and pharmaceuticals. It operates low-cost brine operations in South America along with a U.S. manufacturing base.

Livent supplies companies like BMW and Tesla. It recently locked in an 11-year lithium hydroxide supply agreement with Ford Motor (F) to support Ford’s EV rollout. Livent is also expanding in high-growth lithium-ion batteries.

Q2 2022 revenue grew 66%, helped by rising lithium prices. Livent sees strong demand from the EV industry driving growth for years to come. With its established production and strategic partners, LTHM offers a solid lithium play.

ChargePoint: (NYSE:CHPT) Charging Network With First Mover Advantage

Another key piece of the EV puzzle is charging infrastructure. ChargePoint Holdings (CHPT) operates the largest EV charging network in North America and Europe. The company sells charging hardware and offers subscription software to manage networks.

BNEF forecasts public EV charging ports will soar to 18 million by 2030, up from just 1 million currently. As early movers in charging, ChargePoint has a dominant network covering 113,000 places to charge. This infrastructure moat helps it win new site hosts and customers.

In the latest quarter, ChargePoint’s revenue grew 93% year-over-year. Hardware sales are supplemented by high-margin network subscription revenue. ChargePoint sees a $58 billion serviceable addressable market by 2025 as charging infrastructure scales up. With first mover advantage, CHPT stock offers a long growth runway.

Qualcomm: (NASDAQ:QCOM) Semiconductor Backbone for Connected EVs

EVs require far more semiconductors than internal combustion vehicles to power large battery and infotainment systems. Qualcomm (QCOM) is a key supplier of auto chips that will benefit from rising EV demand.

EVs may use up to 3,000 chips, 10x more than conventional cars. Qualcomm has a strong position in chips that enable connectivity, infotainment, telematics, and self-driving capabilities. Its Snapdragon Ride autonomous driving system offers advanced driver-assistance capabilities up to fully autonomous driving.

Qualcomm has partnered with automakers General Motors, Honda, and Renault on next-gen electric and digital cockpit solutions. Its broad patent portfolio around cellular and WiFi technologies provides licensing revenue from every smartphone and connected car.

With auto chip demand forecast to grow 10% annually to $288 billion by 2029, Qualcomm has a long runway for growth. Its dominance in 5G, WiFi, Bluetooth and telematics makes it a key enabler of smart, connected EVs. QCOM offers broad exposure to the auto and mobility disruption.

>>Related  Chinese Protesters Kill North Korean Official

Conclusion

The electric vehicle revolution is just getting started. As the transition from internal combustion to electric accelerates globally, companies across the EV supply chain stand to benefit. The stocks discussed above offer exposure to critical areas powering the EV boom – from vehicles and batteries to chips and charging.

Each company is a leader in its category with strong growth prospects for the 2020s. But competition is heating up, so continued innovation will be key. Investors should expect some volatility, but the long-term trend toward EVs appears unstoppable.

Building positions in quality EV stocks like Tesla, Li Auto, and BYD as well as lithium miners and semiconductor makers should yield strong returns over time. The coming decade promises to be an exciting period of disruption for sustainable transport – and these EV stocks are primed for the ride.

Frequently Asked Questions

What are the main factors driving growth in electric vehicles?
The key factors propelling EV adoption include:

Government policies like emissions reduction targets and purchase incentives
Expanding charging networks making EVs more convenient
Falling lithium-ion battery costs improving EV affordability
Performance improvements – EVs now out accelerate conventional cars
Growing model availability from luxury brands like Tesla as well as mainstream makes

How much market share will EVs capture by 2030?
According to projections by BloombergNEF, electric vehicles could account for over 30% of new car sales globally by 2030, up from just 5% in 2020. Total EV sales could surpass 30 million by the end of the decade as costs fall and variety increases.

Which EV stocks have the most growth potential?
Some of the EV stocks with the most growth runway this decade include:

Tesla given its strong brand and technology leadership in EVs
Chinese automakers Li Auto and BYD poised to capitalize on massive domestic demand
Lithium miners like Lithium Americas with resources to support soaring battery production
Charging network ChargePoint as infrastructure scales up dramatically

What risks do EV stocks face?
Top risks for the EV sector include:

Reduced government subsidies and incentives if budgets tighten
Supply chain disruptions for components like chips delaying production
Intensifying competition eating into margins as new players enter
Potential rise in lithium/battery mineral prices increasing costs
Technological challenges around advancing battery tech and charging speeds

How can investors benefit from the shift to EVs?
Investors have a few options to gain exposure to the accelerating EV revolution:

Buy shares in pure-play EV automakers like Tesla and Nio
Invest in EV ecosystem stocks like charging companies, lithium miners, and semiconductor makers
Consider auto parts suppliers making EV components like batteries and sensors
Play industrials supporting EV manufacturing build-out
Target EV-related technology companies developing self-driving systems.
A diversified portfolio with exposure across the EV supply chain can help investors capitalize on this transformative trend.

RELATED ARTICLES
Mezhar Alee
Mezhar Alee
Mezhar Alee is a prolific author who provides commentary and analysis on business, finance, politics, sports, and current events on his website Opportuneist. With over a decade of experience in journalism and blogging, Mezhar aims to deliver well-researched insights and thought-provoking perspectives on important local and global issues in society.

Latest Post

Related Posts

x