The electric vehicle (EV) boom is accelerating, which means that electric vehicle stocks are soaring.
In fact, over the past several weeks:
- Tesla (NASDAQ:TSLA) ran from $200 to $590
- Nio (NYSE:NIO) ran from $10 to $57
- Li Auto (NASDAQ:LI) ran from $15 to $47
- Workhorse Group (NASDAQ:WKHS) ran from $4 to $29
- Nikola Corp. (NASDAQ:NKLA) ran from $18 to $28
From here, all could race even higher for three key reasons.
One, according to a new study from the Boston Consulting Group, by 2025, EVs could account for a third of all auto sales. By 2030, EVs could surpass internal combustion engine vehicles with a market share of 51%.
Two, Joe Biden is a fan of electric vehicles. That said, he noted on his site:
“There are now one million electric vehicles on the road in the United States. But a key barrier to further deployment of these greenhouse-gas reducing vehicles is the lack of charging stations and coordination across all levels of government. As President, Biden will work with our nation’s governors and mayors to support the deployment of more than 500,000 new public charging outlets by the end of 2030.”
Three, countries around the world are pushing EVs.
In Europe, for example, “Automakers need to sell more electric vehicles after EU lawmakers in December 2018 ordered them to cut CO2 emissions by 40 percent between 2007 and 2021, and then by a further of 38 percent by 2030, or face fines,” as noted by Reuters.
Moreover, General Motors (NYSE:GM) just announced that it will invest $2.2 billion in U.S. manufacturing to increase EV production. GM is also planning to unveil about 20 new EVs around the world by 2023, including the GMC Hummer EV.
With that said, there’s still time to invest in related EV stocks. And these are five that stand out:
- Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV)
- Tesla (TSLA)
- Nio (NIO)
- Li Auto (LI)
- Workhorse Group (WKHS)
Now, let’s dive in and take a closer look at each one.
Electric Vehicle Stocks to Buy: Global X Autonomous & Electric Vehicles ETF (DRIV)
One of the best ways to diversify your EV portfolio is with an ETF, such as DRIV. Not only does this ETF give investors exposure to EV and autonomous stocks, such as Tesla, Nio, Qualcomm (NASDAQ:QCOM), Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Advanced Micro Devices (NASDAQ:AMD) and Toyota Motor (NYSE:TM), it does so at less cost.
For example, if you were to buy 10 shares of every listed stock, it would cost thousands of dollars. But with this ETF you can gain exposure at just $22 per share.
The last time I weighed in on Tesla, the EV stock traded at $717 per share before the 5:1 split. Now the stock sits at $591, and could easily run well above $1,000 again soon. In fact, there are plenty of catalysts that can help make that happen.
One of them is that the EV stock will join the S&P 500 later this month. Interesting to note, the company is so big, the index is asking for feedback on whether to include the stock all at once on Dec. 21, or break it up over two days.
In addition, according to The Wall Street Journal’s Michael Wursthorn and Gunjan Banerji:
“Tesla’s inclusion is expected to put more than $100 billion into motion. Index funds will have to sell smaller stocks already in the S&P 500, somewhere between $60 billion and $80 billion depending on Tesla’s market cap, and use that money to buy shares of the car maker, asset managers and traders said.”
Secondly, EV demand is through the roof. At the moment, the company pledged to deliver 35% more vehicles this year. And analysts are just as bullish, with Wedbush’s Dan Ives calling for $1,000 a share, seeing “clear momentum around global EV demand inflection heading into 2020 and beyond, with Tesla leading the charge.”
Electric Vehicle Stocks to Buy: Nio Inc. (NIO)
The last time I weighed in on the Nio stock, I noted, “While a good deal of optimism has been priced in, we could see further upside. That is, if the company can continue its string of solid monthly delivery numbers.”
That was on earlier this year, as NIO stock traded right around the $10 mark. It’s now up nearing $50 and could easily run well above $60 per share on strong growth.
Moreover, J.P. Morgan analyst Nick Lai just upgraded the NIO stock to a “buy” from a “hold,” taking his price target to $40 per share. He believes China’s EV penetration could quadruple by 2025, “meaning that about 20% of all new cars sold in China would be battery powered.”
In addition, the company just posted third-quarter earning results. That said, adjusted loss came in at 12 cents, as compared to expectations for 18 cents. Revenue of $666.6 million beat $663.29 million. And gross margins came in at 12.9% as compared to expectations for 11.25%. Even better, with Q4 2020 guidance, the company expects to deliver between 16,500 and 17,000 vehicles.
Li Auto (LI)
Li Auto is another hot EV stock to consider.
Over the last few weeks, the stock ramped from $17.50 to a high of $47.70 and could see higher highs near-term. In addition, the stock was just upgraded at Citigroup to a “buy” rating with a target price of $45 per share.
According to Barron’s Al Root, “In boosting his target price, [Jeff] Chung appears to have become more optimistic about fourth-quarter and 2021 EV sales in China. His new target values Li at roughly 15 times estimated 2021 sales. Tesla for comparison, is trading for about eight times estimated 2021 sales.”
Electric Vehicle Stocks to Buy: Workhorse Group (WKHS)
When I last mentioned Workhorse Group, the stock traded at a low of $17.03. That was on Aug. 26. Nowadays, though, WKHS stock is up to $22 and rocketing higher.
For one, the company recently announced a contract with Ryder (NYSE:R), which will begin using C-Series Workhorse all-electric steam vans. And two, there is a possibility Workhorse Group could win part of a $6.3 billion contract with the U.S. Postal Service.
If that were to happen, it’d be a very big deal. After all, according to Fox Business contributor Gary Gastelu, the Postal Service plans to purchase 180,000 vehicles at a total cost of about $6.3 billion over five to seven years.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.