EV stocks have multiplied in Tesla‘s (TSLA) wake and as electric cars look to go mainstream — but not all are created equal. Some car stocks are more ready than others for an electric future. Here are the top-rated EV makers.
- General Motors
- Li Auto
Best EV Stocks To Buy Or Watch
The charts of most EV stocks remain under strain. Broadly, both established automakers and startups are a speculative bet on the growth of electric vehicles, itself seen as a nascent field. Growth stocks led the bear market in 2022 due to rising inflation and interest rates.
Even Tesla stock keeps getting pounded. It’s hard to find an EV stock with a good mix of fundamentals and technicals right now. Not including Tesla, these are our picks based on EV sales and expansion plans.
Traditional automakers continue ramping up on electric vehicles (EVs), away from gas and diesel cars. Through 2025, General Motors is spending $35 billion to develop electric and autonomous vehicles. It aims to launch 30 new EVs around the world by then. By 2030, GM expects half its global sales to be battery-powered cars.
But 2023 could be a turning point: Three all-new EV models are due from GM’s mass-market Chevrolet brand. Those new EVs include all-electric versions of the Chevrolet Silverado, Chevrolet Blazer and Chevrolet Equinox. The Chevy Silverado pickup is GM’s top-selling model. The Blazer and Equinox are popular SUVs. In the minus column, GM has struggled to ramp up production of new EVs, including the Hummer truck and Lyriq SUV, though its older-generation Bolt EV model is selling well.
In 2022, Ford was the (distant) No. 2 EV maker in the U.S. behind Tesla. Ford’s EV sales more than tripled in December 2022 and more than doubled for the full year. The all-electric F-150 Lightning truck, Mustang Mach-E SUV and E-Transit vans are seeing robust demand as supply headwinds ease, the company says. A new electric crossover for the European market is likely to debut in 2023.
By 2025, Ford plans to spend $30 billion to develop and scale EVs. By 2030, Ford expects half its global sales to be EVs. The new Motor e business will focus on electric cars. Ford also owns a stake in Rivian.
Chrysler parent Stellantis (STLA) carries a 71 Composite Rating, 66 EPS Rating and 89 RS Rating.
By 2030, Stellantis — which also owns Fiat and Peugeot seeks to have 100% of sales in Europe and 50% of sales in the U.S. be fully electric (also known as battery electric vehicles or BEVs). It is targeting 75 BEV models and global annual BEV sales of 5 million units by end of this decade.
In 2023, Stellantis will unveil its first fully electric Jeeps. Availability in the U.S. is expected in 2024, Jeep says. The iconic brand already offers plug-in hybrid-electric Jeep models.
Once seen as an EV laggard, Stellantis ramped up on electrification starting in July 2021.
Nio (NIO) carries a 9 Composite Rating, 1 EPS Rating and 10 RS Rating.
Things are starting to look up for the China EV startup after a brutal couple of years. In 2022, Nio grew EV sales 34%, with a stronger second half offsetting weakness in the first six months. Sales in the final quarter of 2022 jumped 60%, hitting monthly records in November and again in December, even with year-end Covid disruptions. Nio launched three new models last year, including the popular ES7 SUV and ET5 sedan. This year is bringing more new models and refreshes.
Nio is sometimes called the Tesla of China because of its premium, high-tech EV models, though it plans to introduce cheaper sub-brands. The Chinese startup is expanding in Europe as well.
While its fresh model lineup seems well placed for China’s intensely competitive EV market, Nio remains unprofitable. Tesla’s price cuts could affect Nio’s demand and margins.
Li Auto Stock
Li Auto (LI) has a Composite Rating of 22, EPS Rating of 3, and RS Rating of 33.
Another China EV startup, Li Auto turned in an especially strong 2022 despite supply challenges. In 2022, Li Auto grew EV sales 47%, outselling Nio. New models like the L9 and L8 SUVs are selling well. Li set a monthly delivery record in December 2022, with both the L9 and L8 exceeding 10,000 units sold. The company’s strong execution in a challenging year won praise on Wall Street. Li Auto targets the premium market, but its upcoming L7 and L6 models will move down into the affordable luxury space.
Thus far, Li Auto does not produce a fully electric vehicle. Li specializes in “extended range” EVs, which use a small gasoline engine to increase driving range.
As with Nio, Li Auto boasts a fresh lineup with more new models coming. Li Auto has been inconsistently profitable, with losses in recent quarters amid Covid woes and a model changeover. Analysts expect a profitable 2023, though an EV price war could be a factor.
Are EV Stocks A Good Buy?
Companies with two characteristics generally make the best candidates for stocks to buy and watch, according to CAN SLIM guidelines. First, they need a strong track record of earnings growth. Second, they should be technically strong and be shaping bullish chart patterns.
Most of the new EV startups have neither. Those EV stocks include Fisker (FSR), Canoo (GOEV), Faraday Future (FFIE), Lordstown (RIDE) and Xos (XOS). In fact, many of the startups aren’t producing electric vehicles yet.
EV Battery Stocks, EV Charging Stocks
The growing universe of EV stocks doesn’t end with carmakers. A constellation of other companies provide car batteries, car charging stations, electric motors and other EV-related products. Among them are ChargePoint (CHPT), EVgo (EVGO), Blink Charging (BLNK) and Wallbox (WBX).
Magna (MGA) supplies battery enclosures and e-drive gearboxes. It’s also an EV contract manufacturer.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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