6 EV Stocks To Watch: What You Need To Know Before Investing

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In early 2022, as gasoline prices rose, so did electric vehicle registrations. New electric vehicle registrations totaled 158,689, or 4.7% of all new car registrations in the US, according to Experian data reported by Automotive News.

What are the good electric vehicle companies to invest in?

This growth is promising for those looking to invest in the industry. A look at US electric vehicle sales totals, with all four Tesla models dominating the top 10 list, may point you in the right direction. Especially after the stock split in August 2022, Tesla is one of the best values ​​in electric vehicle stocks if you’re looking for a long-term investment.

But there are plenty of other EV stocks that are also showing promise at the moment, spanning both domestic and international EV manufacturers and one mainstream automaker heavily invested in EVs at the moment. We also include an EV ETF for more risk-averse investors looking to invest in the EV market while maintaining a diversified portfolio.

Why invest in electric vehicle stocks?

EV shares are attractive for their growth potential, as well as for investors looking to support sustainable companies. Investing in stocks shouldn’t be an emotional game, but it’s fun to invest in brands you believe in, and in almost every case, electric vehicle manufacturers are looking to build a better, greener world with their technology solutions.

How to identify the best electric vehicle stocks to buy now

When evaluating EV stocks, as with stocks in any industry, it’s important to look at the company’s growth potential versus its current value. Look at the company’s cash reserves, profitability, and company fundamentals.

Tesla (TSLA)

Tesla is the clear industry leader when it comes to electric vehicle sales in the US in recent years, with 56.7% of sales in 2021 going to the four Tesla models, according to CleanTechnica .org.

Trading at approximately $277 per share at the end of September 2022, Tesla represents tremendous value after its 3-to-1 split. Analysts give Tesla a 12-month median target of $329.17, with a high estimate of $526.67 and a minimum of $83.33. Tesla shares have remained a “buy” among most analysts for several months, even before the split.

Ford Motor Company (F)

A legacy automaker with a strong history, Ford trails Tesla in electric vehicle sales by orders of magnitude. Still, the Ford Mustang Mach-E, which hit showrooms in December 2020, ranked as the third best-selling electric vehicle, just behind Tesla’s affordable Model Y and Model 3 cars, in 2021. Ford Up Truck’s F-150 Lightning all-electric pick-up is also showing promise, especially since Tesla has yet to deliver its much-hyped and highly-anticipated Cybertruck.

Facing supply chain issues and inflation, Ford delivered a lackluster quarterly report for the third quarter of 2022, causing the stock to plunge. Currently trading at just over $12 on September 26, 2022, the stock has a price target of $18.28. It produces dividends of $4.87%, which may make it desirable for investors seeking income from the stocks they own. According to MarketBeat, the stock has 7 “buy” ratings, 10 “hold” ratings, and only three analysts recommend it sell now.

Child (CHILD)

Nio, a Chinese electric vehicle maker that specializes in luxury autonomous vehicles, was recently named “China’s best electric vehicle pick” by a Deutsche Bank analyst.

The upcoming launch of the ET5 mid-size electric sedan, along with the launch of the ET7 full-size sedan and ES7 electric SUV in 2022, has created positive vibes for the company among investors. The existing ES6, ES8 and EC6 continue to see strong sales in China. These models are expecting updates over the next year, which will also bode well for sales.

NIO shares continued to rise for the fourth straight season, Investors.com reported. It is still 51% below its 52-week high, however, placing it firmly in “buy” and “hold” territory.

XPeng (XPEV)

NIO’s main rival in China is XPENG Motors, which produces the G3 SUV and the P7 four-door sports sedan. XPeng sales increased 96% year-over-year, compared to NIO’s sales increase of 28%. Given supply chain challenges and increasing competition, this is almost phenomenal growth for both companies.

From an investor’s point of view, there is a lot to like about XPeng right now. The new G9 SUV, which the company claims is “the world’s fastest charging electric vehicle,” according to Electrek.co, is expected to start shipping to China in October.

Despite the company’s promising future, the stock has fallen 73% since the beginning of 2022. Chairman and CEO He Xiaopeng increased his stake with a $30 million share purchase. Trading for just under $15 on Sep 26, 2022 and rising after the purchase of Xiaopeng, Xpeng has a moderate buy rating and a price target of $36.32. It may be wise for investors to get in before the G9 starts shipping.

Charge Point (CHPT)

With more than 20,000 charging station locations, ChargePoint is the world’s largest and most open electric vehicle charging network. It currently operates in 14 countries, according to SeeklingAlpha.com, and even in the US and Europe. ChargePoint has helped electric vehicle drivers collectively travel more than 158 million miles.

Still, the company’s ChargePoint shares have fallen below $15 of late, after reaching an all-time high of over $46 in December 2020. However, SeekingAlpha.com says the company has a “long way to go.” growth”, which means that you will get shares “for sale” at this time. The stock is recommended for growth investors with a long-term horizon. And, if you follow Warren Buffet’s investment advice, you don’t want to own stocks for 10 minutes that you don’t have for 10 years.

That longevity is one element that makes the electric vehicle market, in general, so attractive. And ChargePoint is one to buy or hold, right now, in the eyes of investors. MarketBeat analysts give it a “moderate buy” rating, with 10 analysts saying buy and another 4 saying hold. It has a consensus price target of $21.13 and plenty of room to grow.

iShares IDRV ETF

If you’re interested in investing in the electric vehicle market but prefer to avoid taking a chance on one company, an ETF is a way to build a diversified portfolio around a strong, fast-growing industry. Save time and avoid sifting through all the options from EV manufacturers, EV charging station providers, or companies that create components like batteries or chips with an exchange-traded fund like IDRV.

IDRV, part of the iShares Megatrend ETFs, tracks the stocks of companies heavily involved in the electric and hybrid vehicle industries, including Tesla, Nio, Rivian, Apple, Ford, Toyota, and component makers Qualcomm and Samsung. Its holdings are diversified into 119 companies, predominantly involved in the manufacture, sale or support of electric and autonomous vehicles.

US News & World Report gives IDRV a high rating in the industrial sector, calling it a “Best Fit” fund in the category. The fund has net assets of $414,608,152 and is currently trading at just over $35 per share.

How to start investing in electric vehicle stocks

Once you’ve researched your favorite EV companies, as well as those showing promise in the industry and related industries, you can buy stocks through an app from almost any broker.

Pay attention to the fees and commissions they charge, as well as account minimums, when choosing a brokerage. Many stock trading apps offer commission-free trading. If you’re interested in ETFs or foreign stocks, you’ll want to make sure you can also trade them on the platform of your choice.

Investing in EV stocks is a way to support future sustainability efforts while building a portfolio with plenty of room for growth.

Daria Uhlig contributed reporting to this article.

Data is accurate as of September 26, 2022 and is subject to change.

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