Most Americans still have a cultural love affair with the automobile, and that may never change. But in recent years, the sharp rise in gasoline prices (compared to decades ago) along with demographic trends have dampened enthusiasm toward traditional cars. But electric vehicles have steadily increased in popularity, and so too have EV stocks.
Fundamentally, electric vehicle companies have a number of factors working in their favor. The most obvious is cost. Should the national gas-price average move to $4 or beyond, presumably most people will consider alternatives. At $5 or $6, I’d say it’s an absolute certainty.
This dynamic also plays into government initiatives, which seek to reduce foreign-oil dependency. Furthermore, environmentalists will be pleased as punch that we’re finally taking their advocacy seriously.
But EV stocks aren’t exclusively based on domestic concerns. In Europe, for instance, gas prices are through the roof relative to what we pay. For these folks, an efficient EV makes more sense than a gas-guzzling, or even a gas-sipping car.
Finally, EVs have garnered a social and cultural status that was unimaginable when the concept was first born. A prime example is Ferrari (NYSE:RACE), which plans to offer a supercar EV.
Clearly, this is no longer a niche market. Here are seven fully charged EV stocks to boost your portfolio!
EV Stocks to Consider: Tesla (TSLA)
I know I’m not scoring any originality points for mentioning Tesla (NASDAQ:TSLA) on my EV stocks to consider list. We all know the celebrity-media circus that sometimes surrounds Tesla CEO Elon Musk. Plus, let’s be honest — TSLA has the reputation of being a “fanboy” investment.
As my InvestorPlace colleague Larry Ramer pointed out in September of last year, TSLA stock is unattractively valued. And on paper, nothing much has changed several months later. Plus, Ramer understandably notes that TSLA priced in mass adoption of its EVs, “even though there is as yet no concrete sign that such a development will occur.”
So why do I think TSLA is still one of the best EV stocks around? Primarily, the company has produced serious results. As I mentioned, following the company’s bizarre Q1 earnings conference call, Tesla is the eighth-most valuable automotive brand. So yes, the company is ultra-ambitious, but in this case, it’s confidence, not arrogance.
Moreover, an investment in TSLA stock is an investment in Musk, and I’m perfectly fine with that. The company has been through a lot recently, but I trust Musk’s one-of-a-kind brilliance. Some have rightfully questioned his eccentricities. However, keep in mind that those eccentricities are what brought Tesla to where it is today.
EV Stocks to Consider: General Motors (GM)
Last year, the Tesla Model S was hands-down the best-selling EV on a unit basis, selling just over 27,000 cars. But the Chevrolet Bolt wasn’t too far behind with a total tally of 23,300 EVs. That’s obviously an encouraging sign for parent company General Motors (NYSE:GM).
To be clear, I’m not exactly the biggest believer in GM stock. In April, I wrote that shares will stall due to an unfavorable domestic market. However, GM surprised me by shooting northward, although it did fall dramatically from its highs. When you have deteriorating relations with a key growth market, things like this happen.
Thus, GM is a risky play among EV stocks. Certainly, you’re going to need a longer-term outlook and a lot of patience. But those caveats aside, the Chevrolet Bolt’s success can’t be ignored.
The Bolt was a surprise, breakaway success in 2017, and this year carries that momentum forward. From January through May, Chevrolet has sold 6,486 units. Against the same timeframe last year, this represents a 9% lift.
Now, in recent months, sales have dipped on a year-over-year basis. However, the Bolt’s sales aren’t necessarily consistent on that particular basis. I think the more significant issue is that GM has an EV winner on its hands, and this bodes well moving forward.
EV Stocks to Consider: Nissan (NSANY)
When investors discuss EV stocks, a few popular names always come up. I seriously doubt, though, that Nissan (OTCMKTS:NSANY) is the first, or even the fifth company mentioned. Nissan is a great organization, but it doesn’t generate much attention outside of its automotive expertise.
However, management would like to change that equation with their Nissan Leaf. When the Leaf first launched, I considered it an automotive abomination. Despite many technical strengths, it didn’t overcome the car’s extremely unpleasant aesthetics. If you wanted to commit to a life of celibacy, the original Leaf would guarantee it.
But thankfully, Nissan didn’t stop improving their EV concept. Today, the Leaf is a decent looking vehicle, on-par with the Chevrolet Bolt. But where the former has the advantage is pricing. According to Car and Driver, the Leaf starts at under $31,000. In contrast, the Bolt is priced right under the $37,500 mark.
As previously mentioned, the Bolt is a big winner for GM. It also shows in the sales results. Last year, the Nissan Leaf sold 11,230 units. But with the face-lift and upgraded features, Nissan’s EV could potentially help lift NSANY stock from its doldrums.
EV Stocks to Consider: Toyota (TM)
None of Toyota’s (NYSE:TM) product offerings appear in last year’s top-five selling EVs. Even more startling, demand for Toyota’s popular hybrid car Prius has dipped into subterranean territory. By the numbers, since 2014, the average annual decline in Prius sales is 19%.
So why on earth would I include TM in my list of EV stocks to consider? To answer this question, we must understand the broader context of the Prius’ decline. Until recently, depressed gasoline prices offered buyers more options for their money. That in turn meant that customers sought more highly advanced cars, such as plug-in EVs.
Furthermore, the Prius, as I mentioned about the original Nissan Leaf, isn’t a looker. I’d argue that most folks think it’s at least uninspiring, if not unattractive. But don’t let the current state of affairs fool you: TM is very much a player among EV stocks.
Late last year, Toyota announced that it will offer “electric versions of every model of its vehicles by 2025, and hitting a target of selling 5.5 million electrified vehicles by 2030.” That is significant because Toyota, and especially its luxury-brand Lexus, feature some exciting vehicles.
As an added bonus, this year’s soft performance in the markets could provide long-term investors with an attractive entry point.
EV Stocks to Consider: Renault (RNLSY)
Among EV stocks, Renault (OTCMKTS:RNLSY) is easily one of the riskiest. Since closing at a high this year of $24.42, on March 29th, RNLSY stock plummeted to below $17. In three months, Renault lost over 30% of market value, which is definitely not a confidence-booster for shareholders.
So what’s the justification for going long on RNLSY stock? Renault is a speculative bet on two factors: its superior product, and the European EV market.
Let’s start with the first item. Most Americans probably haven’t heard of the Renault Zoe. But according to Industry Leaders, the Zoe is “the best electric car model of the year in terms of performance and price. It possesses R110 engine with an option of fixing Q90 motor for fast charging. Zoe is a compact 5-door city car but it appears like a coupe.”
This balancing of performance and price fits perfectly for the European EV market, which is virtually guaranteed to explode higher. How am I so sure? It has to do with gas prices, which are ridiculously and perhaps prohibitively expensive in Europe.
That’s not to say that European electricity prices are cheap, because they’re not. But consider that U.K. gas prices are nearly 120% higher than in the U.S., whereas electricity prices are 14% higher.
For RNLSY stock, it just comes down to simple math.
EV Stocks to Consider: Panasonic (PCRFY)
An intriguing component of EV stocks is that they’re not just levered to automakers. Without specialized, high-performance batteries, the EV concept would never come to fruition. So if you’re not too hot on the above direct investments, you should consider Panasonic (OTCMKTS:PCRFY).
According to Nikkei Asian Review, Panasonic is the world’s number-one supplier of EV batteries. Despite rising competition from Chinese companies, the Japanese tech giant is keen on maintaining this lofty position. Ironically, China has handed Panasonic the means to stay number-one with favorable policies that don’t discriminate against foreign companies.
Of course, that doesn’t mean the challenge will be easy as Chinese upstarts aggressively fight for their own lucrative market. Furthermore, Panasonic currently does most of its EV business with Tesla.
That said, management recognizes their weaknesses and are taking steps to mitigate them. For example, they’re exploring a potential partnership with compatriot Toyota. If it works, that would eventually resonate with PCRFY stock, as Toyota has huge plans for its EV rollout.
Also, I love the fact that management responds effectively to fundamental pressures. When cobalt prices starting mooning, Panasonic adjusted with lithium-ion batteries incorporating little to no cobalt. The combination of technological prowess and business smarts makes PCRFY a must-watch stock.
EV Stocks to Consider: Sociedad Quimica y Minera de Chile (SQM)
The most indirect play among my EV stocks list is mining outfit Sociedad Quimica y Minera de Chile (NYSE:SQM). As I said above, EVs need specialized batteries to exist. But for these batteries to exist themselves require lithium, and by the boatload.
As I wrote in my recent story, “Top 20 Stocks to Buy for 20-Somethings!,” Chile has the largest global reserves of lithium, with an estimated 7.5 million metric tons. If you’re doing anything electricity-related, chances are, you’re going to need lithium. This sole fact makes Chile, and SQM stock, indispensable. Furthermore, Chile is a relatively stable and friendly jurisdiction, and it will probably stay that way.
And while SQM isn’t a direct play on EVs, this also has its advantages. If for whatever reason the EV market tanks, lithium has many other civilian and military uses. It really is the future generation’s crude oil, and that alone makes SQM a compelling buy.
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As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.