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Tag: Best EV Stocks

  • Five Best EV Stocks to Bet on in 2022

    Five Best EV Stocks to Bet on in 2022

    The opportunity arising from the global automotive transition toward electrification has been called by analysts as being nothing short of revolutionary. Given its implications in terms of clean energy, as well as its potential to remain resilient against inflation, the opportunity presented in electric vehicles is not one that often arises. Top EV stocks are increasingly becoming an investor favorite amongst a wide array of different investment classes. Governments, climate change activists, and even industries have hardly ever been on the same page, as they are about the potential of EVs. Even the notorious fossil fuel industry is coming to terms with the inevitability of electric vehicles and has thus been adjusting its future-looking strategy accordingly. Therefore, in light of this critical transition, we bring yet another list of the five best EV stocks that hold immense opportunity going forward. These could see one’s portfolio soar in the upcoming years.

    XPENG Inc.

    To start off our list, we begin with the Chinese smart EV manufacturer, XPENG Inc. (NYSE: XPEV). China remains one of the most dynamic and competitive markets for EV companies, and XPENG is emerging as a key player. In the month of July alone, the company delivered over 11,500 vehicles, which translates to an incredible 43% year-on-year growth. Both these figures put XPENG above its regional rivals, NIO and Li Auto. This impressive growth comes despite outbreaks of different Covid-19 variants and subsequent factory shutdowns.

    Despite taking the lead in China’s highly dynamic EV space, XPENG has seen its share price plummet by almost 55% since the start of the year. This makes its valuation extremely attractive, given its strong competitive position, and annual revenue of $3.3 billion, in 2021. The company is aggressively focused on dominating the Chinese EV market, even at the cost of its profitability. The company is still in its early pre-profit phase, with its EPS figures standing at -$1.1 and -$0.86 for 2020 and 2021, respectively. Analysts hold a consensus of XPENG turning in a profit by 2024 when its sales are expected to reach close to the $15 billion mark, which will make it one of the best EV stocks.

    XPENG presents a phenomenal opportunity for those seeking to make an early move on this key player. Its valuation is extremely attractive, and its growth will skyrocket once it begins delivering positive EPS.

    Arrival

    Moving on to the second stock on our list, we present the small EV startup called Arrival (NASDAQ: ARVL). As is the case with any tech startup, Arrival inherently holds a high degree of risk, yet the sheer promise it aims to deliver is phenomenal, and cannot be stressed enough. The startup offers a unique business model which allows it to overcome the barriers to entry in the EV industry. Instead of large multibillion-dollar facilities, Arrival works with fully automated micro-factories that cost close to $50 million each. These facilities use proprietary technologies and robotics to minimize legacy costs. This feature significantly reduces heavy upfront capital investments.

    Arrival is far from being all talk and no work, as it has achieved several critical milestones towards the execution of its business strategy. One of its vehicle types, the Arrival electric bus received EU certification in May 2022, giving it a critical green light to move on with its plans. Similarly, its van class vehicle was also certified by the EU, and given the go-ahead for production, which the company expects to start delivering to customers by the end of the year. The delivery company UPS has made a significant amount of pre-orders on Arrival vans, by the end of the year, which would be a crucial catalyst indicating that its unique business model is capable of being executed. The startup is also collaborating with ride-hailing giant, Uber, with its EV car class, which it has stated will begin production by the third quarter of 2023.

    Arrival presents a unique, high-reward opportunity that is worth considering for those that can tolerate a certain degree of risk within their portfolio.

    BorgWarner Inc.

    The third stock on our list of best EV stocks is BorgWarner Inc. (NYSE: BWA). BorgWarner essentially provides services to combustion, hybrid, as well as electric vehicles across the world. In the face of increasing demand, the company is currently shifting gears to go all in to cater to the EV market, in its attempts to keep up with the global automotive transition. In order to position itself for the surging EV demand, BWA has engaged in a number of deals and acquisitions that boost its standing in the electric space.

    Amidst the uncertainties and pessimism surrounding Covid-19, BorgWarner closed a $3.3 billion deal to acquire Delphi technologies, in a strategic bid to strengthen its electronics segment, and better serve the EV market through a cutting-edge and innovative approach. As a result of Delphi’s contributions, as well as organic growth, BWA revenues in 2021 climbed by an annual 46% to $14.8 billion. Similarly, on February 2022, BWA acquired AKASOL AG, the European battery specialist in a deal worth 727 million Euros. The move is set to add crucial EV expertise to BorgWarner, enabling it to perfectly capture the immense EV opportunity that is only set to grow further.

    These strings of acquisitions and deals are not by chance and are highly strategic. BorgWarner anticipates the oncoming EV boom and is positioning itself along those lines. The best time to buy the stock is before it begins realizing the gains of this ambitious strategy.

    Rivian Automotive Inc.

    Number four on our list of best EV stocks, is the large company, Rivian Automotive Inc. (NASDAQ: RIVN). As you may have realized, the global EV market is sprawling with a number of key players, each with unique strengths, so what exactly does Rivian offer, that puts it a cut above its market rivals? The answer is simple. The company can afford to go big in the market. In addition to a robust balance sheet, with almost $15 billion in cash holdings, Rivian holds cutting-edge technologies that enable it to take on EV giants such as Tesla.

    Throughout the EV industry, companies tend to subcontract critical production functions to specialist parties. Rivian, however, is playing the long game, and hence is spending heavy amounts on developing both EV hardware and software, as well as cutting-edge manufacturing systems, instead of outsourcing. This move is likely to deliver the company structural cost advantages in the long term, giving it a substantial edge over its rivals. This strategy has already, at this early stage been delivering stellar results to the company. Most notably is the large order by the e-commerce king, Amazon, which has pre-ordered a staggering 100,000 electric delivery vans.

    Given this promising strategy, which RIVN is very much capable of affording to execute, it could see itself as leading the global EV industry in the long-term future.

    EV Technology Group Ltd.

    The last stock on our list is the young company, EV Technology Group Ltd. (OTC: EVTGF). The company is barely a year old and has a market cap of a mere $93 million. The company’s strength lies in one area that most EV players pay little heed to brand equity. One way EVTGF has actualized this commitment is through the acquisition of Moke International, the company responsible for the legendary Mini Moke vehicle which was highly popular in the UK and Australia from the 60s to the 80s. This motorist’s darling is making a comeback in electric form, and EVTGF stands as the biggest beneficiary.

    The company’s entire strategy toward financial sustainability is focused on enhancing brand equity. It would also allow the brand to charge a premium on its vehicles, and allow for differentiation against the competition. This move could potentially be a core driver of market share capture over time. Demand for EV cars is far from slowing down, and will only surge with time. With this in mind, brand equity and differentiation could be the crucial difference between success and failure. Therefore, this approach is not one to take lightly and could be heavily beneficial to the company in the long term. At present, its balance sheet reports a total cash holding of $1.2 million, which is sufficient to see it push through the upcoming quarters and make it a worth enough EV stock to invest.

    Conclusion

    The electric vehicle market is at the forefront of the global transition towards energy self-sufficiency programs and decarbonization. For this reason, the market has been quick to restructure itself along these lines, with demand for these stocks seeing a spectacular rise. As electric vehicles continue to become more efficient and less costly, their market growth potential surges. This class of stock offers unparalleled growth opportunities, which would enable investors’ portfolios to fly high in the short to long-term future.

  • Best EV Stocks to Buy Now

    Best EV Stocks to Buy Now

    When we talk about the Electric Vehicle or the EV stock market, what’s the first thing that pops into your mind? Tesla Inc (TSLA) might be the company that comes to your mind if you have kept up with the mainstream trends around EV. That’s because we have heard about Tesla as the world leader and pioneer of the electric vehicle market.

    And we have heard about Elon Musk, the CEO of Tesla, who launched the TESLA Roadster into space as one of the most phenomenal marketing tactics ever. And if you have heard of Tesla, chances are, you have heard about the Chinese EV company NIO that is fiercely competing and trying to emerge as an EV leader in China.

    However, if you are looking to invest in the EV market, you need to take few steps back from what the mainstream topics and trends are telling you. According to a new market research report, the EV market is growing and is only in the nascent stage despite being a $1656.9 billion worth global market. The EV market is expected to grow at a compound annual growth rate of 33.6% from 2020 to $2495.4 billion in 2027.

    Before we dive into the top EV stocks you can invest in let’s take a look at what is driving the growth of these EV stocks.

    Researching the few fundamentals and variables driving this growth in the EV market can help us a long way in deciding how and which EV stock we should invest in.

    So the main phenomenon that is driving the Electric Vehicle market includes the global drive towards green energy and sustainable zero emissions. Governments and world leaders are creating favorable policies and regulations regarding EV adoption. The free market has played a role in reducing the cost of sourcing batteries. The OEMs are investing heavily to create a profitable business in the EV landscape.

    However, there are some caveats to this growth. The scalability and standardization of the EV market are fragmented in countries and regions of the developed part of the world. The development of EV infrastructure and favorable economic conditions are yet to be globalized. Furthermore, there are very different EV portfolios in the EV stock market based on the electric vehicle and propulsion type of the EV.

    Ford Motor Company (F)

    So let us begin now with the EV stocks! The first on our list is Ford Motor Company (F). We have chosen Ford because of its legendary reputation in the car industry and its shift towards Electric Vehicles. With a market of $58.6 billion, Ford has a diverse and robust strategy for the electrification of its automotive operations. The company’s recent Ford+ (plus) plans expect to generate almost half of its global sales through EV by 2030.

    Furthermore, the company aims to invest more than $30 billion through 2025. One other primary reason that makes Ford’s EV portfolio more attractive is that the company has revealed its three most iconic EV products, which include the elite sports and passenger vehicle- The Mustang Mach E, all-electric and available in the market. Then comes the F-150 Lightning series, which is an all-electric pickup truck. This vehicle caters to the class B vehicle segment. And third is E-transit, an all-electric van that caters to the fleet performance requirement and light commercial vehicle segment.

    This diverse portfolio, along with the Ford company’s scalability power, will allow it to carry its powerful ICE automotive reputation while switching its profitability through the EV market.

    NIU Technologies (NIU)

    The second stock on our list is known as NIU Technologies (NIU). It has a market cap of $2.454 Billion and has seen impressive growth for the past two years. The company, since its inception, had grown in value by roughly 250% since its IPO in October 2018. We chose NIU stock for our pick in the top growing EVs because it picks up a certain niche in the large addressable market of EVs. This niche corresponds to the manufacturing of electric smart scooters and pedal bikes and is a less crowded market with many potentials. NIU caters explicitly to this niche demand in one of the largest growing EV markets: China.

    NIU generated sales of around $85.6 million in the first quarter, which is a 135% year-over-year growth. Despite the dip in the EV market in May, NIU also lost 10.8% of its stock value, and it still sold 149,649 electric scooters in Q1. Out of which 97% of the sales came from the Chinese market. NIU stock has a compound annual growth rate of 7.7% for the next decade, and despite the growing competition, it is still expanding to the rest of the Chinese market.

    Hyliion Holdings Corporation (HYLN)

    Third, on our list is an eccentric EV stock called Hyliion Holdings Corporation (HYLN). It is a $1.964 billion company run by a 28-year-old CEO known as Thomas Healy. Last year, the company went public through a SPAC deal with Tortoise, and since then, it had seen volatility in price during 2020, fluctuating from $10 to $50 and back to $10. However, we chose HYLN stock because this company caters to the deficiencies and limitations in the EV market that we talked about. The charging station and ports availability limitation makes it hard for EV vehicles to sustain their range, especially for Heavy-Duty trucks or Class 8 trucks.

    Thomas Healy has taken a page from Elon Musk’s book and has turned this limitation into an opportunity for innovation and drive towards a niche. This niche specifically caters to the needs of the 8th Class trucks by transforming them into what Hyliion calls Electrified Powertrains.

    Electrified Powertrains is the concept where Hybrid energy engines power class 8 trucks; they are electric engines that also have backup natural or hydrogen gas generators for creating electricity. Its EV battery next-generation module with quicker recharging and 40% more effective battery cooling technology reflects growth and innovation in its Hypertruck ERX production line. Hyliion took this approach to bridge the gap between the lack of electric recharging availability and heavy-duty trucks’ long-range requirements.

    With 700 natural gas stations all over America, according to Hyliion, this is a better approach than consuming gasoline and more efficient than having full electric trucks with no range. According to the company, the niche has a total addressable market of $800 billion and 8 million trucks.

    For the year 2021 and beyond, there are bullish signals for the EV market. Hyliion will continue to flourish in this underdeveloped niche market as long as EV charge and range limitation exists. The company’s estimation of revenue growth from $8 million in 2021 to more than $2 billion in 2024 does not look far-fetched from this point of view.

    NIO Inc (NIO)

    Fourth on our list is NIO Inc (NIO). The market value of the company is 83.410 Billion. Yes, we did mention NIO stock as a mainstream stock initially, but the growth of this EV company is uniquely undeniable and is stealing Tesla’s thunder. Analysts, bureaucrats, and even Elon Musk admitted that China is expected to be the biggest market for Tesla, with 41% of China’s global EV market share. However, the recent US-China relations have deteriorated.

    The rug has been pulled from under Tesla as China has recently implemented bans on government authorities having ownership of Tesla and banned Tesla vehicles from government compounds and agencies. This leaves the Chinese market all for NIO to grab since no one takes the throne second in China.

    Moreover, the company is entering the Norwegian Market as well; thus, now expanding and growing far beyond its border. The sales of the Chinese EV champion have leaped over 95% year over year and have forecasted 21000-22000 EV car deliveries from the current quarter. Apart from the general trend and sentiment of the EV market’s growth, NIO enjoys an edge for the market share capacity and space given due to these geopolitical tensions. Bloomberg NEF believes that EV sales are expected to grow from 1.7 million in 2020 to 54 million in 2040, in which China would represent sales share accounting 18 million.

    Global X Autonomous & Electric Vehicles ETF (DRIV)

    The final EV pick on our list is an ETF known as Global X Autonomous & Electric Vehicles ETF (DRIV). This ETF was picked by us majorly for investors out there that want to dive into the EV stocks but don’t know where to start. This $900 million market cap of DRIV ETF gives a diversified exposure to investors in the EV market. It has a total deep portfolio of 76 stocks and has an expense ratio of approximately 0.68%.

    DRIV does not only consist of pure Electric Vehicle play but consists of the overall plug-in car play. Plug-ins mean that it includes Autonomous Vehicles, Hydrogen Fuel Cars, Hybrids; therefore, it depends on the EV fuel propulsion and reduces the volatility and limitation of the EV pure-play investment and market. The Price to Equity ratio shows a very reduced premium compared to the over 900% increased share prices of Tesla and NIO. DRIV has shown a CAGRof 23.76% since its initiation.