Electric vehicle (EV) stocks have been hot over the past year. Currently, Tesla is regarded as one of the most successful names in the drive to electrification. However, lately even more established, mainstream names like Ford and General Motors have also been taking significant steps to join the EV revolution. As such, this article covers a variety of electric vehicle stocks for betting on a carbon-neutral world.
Over the years, humanity has relied heavily on fossil fuels. This has lead to a depletion of reserves and the large-scale emission of carbon dioxide, which scientists regard as a major contributor to climate change. Now, though, consumers and governments are taking steps toward carbon neutrality. A recent study led by researchers from Daimler (OTCMKTS:DMLRY) and Karlsruhe Institute of Technology highlights:
“Global climate change has led many governments to issue ambitious targets for renewable energies and CO2 mitigation goals for the transport sector. With respect to the latter, vehicle manufacturers increasingly expand their portfolio to battery electric (BEV) and plug-in hybrid electric vehicles (PHEV) (together: plug-in electric vehicles, PEV).”
As a result, in the past 12 months, the momentum in electric vehicle stocks has been extremely robust. Battery and charging companies have also rallied. However, given that a busy earnings season is upon us, pullbacks in the share prices of many EV companies would make sense. Long-term investors could regard those price drops as better entry points.
All in all, this industry has a bright future in the new decade. Of course, though, not all EV stocks are created equal. So, as always, potential investors need to do their due diligence before putting in capital. That in mind, here are seven electric vehicle stocks to take a closer look at:
- Blink Charging (NASDAQ:BLNK)
- Ford (NYSE:F)
- General Motors (NYSE:GM)
- Livent (NYSE:LTHM)
- Tesla (NASDAQ:TSLA)
- Volta and Tortoise Acquisition II (NYSE:SNPR)
- Xpeng (NYSE:XPEV)
Electric Vehicle Stocks to Buy: Blink Charging (BLNK)
52-week range: $1.55 – $64.50
One-year price change: Up over 2,550%
Charging infrastructure is becoming increasingly important in the adoption of EVs. Blink Charging operates over 23,000 EV charging stations and offers residential and commercial charging equipment. And with a current market capitalization of $1.88 billion, it certainly has more room for growth.
On Mar. 25, Blink announced its fourth-quarter and full-year results. Quarterly revenue went up by 250% to $2.5 million, compared to $700,00 for Q4 2019. Net loss came at $7.9 million or 24 cents per basic and diluted share. A year ago, Blink had a net loss of $2.9 million or 11 cents. Finally, as of Dec. 31, cash and marketable securities were $22.3 million compared to $7.1 million a year prior. Looking forward, CFO Michael Rama noted:
“In January, we completed a successful equity raise, significantly strengthening our balance sheet, which will enable us to continue our growth at a systematic and accelerated pace. Our growth will continue both organically and through targeted acquisitions as we look to grow our footprint of EV chargers.”
Because this company owns and operates its charging stations, raising cash to grow operations has been necessary over the past year. At these stations, Blink charges a margin on the cost of the electricity offered. But the company’s charging revenue is not enough to make it profitable any time soon. Thus, its current stock valuation is extremely high.
Right now, BLNK stock’s forward price-sales (P/S) and price-book (P/B) ratios stand at 167.36 and 62.34, respectively. So, for this pick of the electric vehicle stocks, potential investors could wait for a further pullback toward the $30 level or lower.
52-week range: $4.52 – $13.62
One-year price change: Up about 167%
The next pick of the electric vehicle stocks on this list is legacy automaker Ford. As you probably know, this company manufactures a full line of cars, trucks and sport utility vehicles (SUVs) as well as luxury vehicles. Ford is also regarded as one of the most important names in pickup trucks stateside. Last year, it sold some 4.2 million vehicles. However, now the company is also looking to expand its presence in EVs.
Ford released robust Q4 and full-year results back in early February. Quarterly revenue declined by 9% year-over-year (YOY) to $36 billion. GAAP net loss was $2.8 billion compared to a loss of $1.7 billion in the prior year. However, adjusted diluted earnings per share (EPS) of 34 cents beat expectations. The car maker generated $1.9 billion in adjusted free cash flow during the quarter and ended 2020 with $31 billion in cash.
Overall, analysts were pleased with the operating and financial momentum that Ford showed in 2020. In terms of next steps, however, CEO Jim Farley also remarked the following:
“The transformation of Ford is happening and so is our leadership of the EV revolution and development of autonomous driving […] We’re now allocating a combined $29 billion in capital and tremendous talent to these two areas, and bringing customers high-volume, connected electric SUVs, commercial vans and pickup trucks.”
Over the past several weeks, the global shortage of semiconductor chips has forced Ford to decrease production in North America. The decision could mean a $1 billion to $2.5 billion fall in Ford’s earnings for 2021. However, management is expected to take proactive steps.
Despite the chip shortage, analysts expect Ford to be successful in its EV transition, leading to higher revenue and profitability. Currently, F stock’s forward P/E and P/S ratios stand at 10.94 and 0.35, respectively. Trading at $12.60 today, a decline closer to $12 would offer a better entry point into the shares, with Ford’s EV segment poised to become a definite game changer.
General Motors (GM)
52-week range: $20.12 – $63.44
One-year price change: Up about 182%
Next up on this list of electric vehicle stocks is another legacy automaker, General Motors. Readers are probably already well familiar with this company’s iconic brands, such as Cadillac, Chevrolet and GMC. Last year, the Chevrolet Silverado was one of the best-selling vehicles in the United States. Recently, though, GM has been putting considerable resources into developing electric and autonomous vehicles.
In early February, General Motors announced strong Q4 and full-year 2020 metrics. Full-year income was $6.4 billion, resulting in diluted EPS of $4.33. Additionally, full-year automotive operating cash flow came at $7.5 billion and adjusted automotive free cash flow was $2.6 billion. In a letter to the shareholders, CEO Mary Barra highlighted the strong demand for Chevrolet, GMC and other brands. Barra noted:
“These products helped drive our largest year-over-year gain in total U.S. market share since 1990. Just as important, their profits are helping us create a new chapter for GM that is electric, connected, sustainable, inclusive and growth-oriented.”
Put another way, management is not shy to advertise its intentions of becoming a winner in the hot EV space. However, the current chip shortage has also forced General Motors to decrease production at four of its plants. As a result, shares of GM stock have been volatile in the past several weeks.
Right now, GM’s forward P/E and P/S ratios stand at 11.63 and 0.63. Given how much the shares have soared since the second half of 2020, a potential decline below $55 is possible. In the long run, however, both its legacy business and its ongoing electrification efforts will help create shareholder value.
52-week range: $4.71 – $23.99
One-year price change: Up about 229%
Livent is a lithium technology group and the next entry on this list of electric vehicle stocks. Of course, the company does supply products for a range of industries, but its lithium products are especially necessary in EV batteries.
On Feb. 18, Livent released results for Q4 and fiscal year 2020. Quarterly revenue was $82.2 million, up 13% sequentially, thanks to both “higher volumes sold and better realized pricing.” Additionally, adjusted EBITDA was $5.6 million while adjusted loss per share was 2 cents per diluted share.
In the report, management also announced a multi-year supply agreement with BMW (OTCMKTS:BMWYY). Accordingly, Livent will deliver BMW Group “both lithium hydroxide and carbonate.” Back in November, Livent also extended its supply agreement with Tesla for another full year. On the new agreement with BMW, President and CEO Paul Graves noted the following:
“This key partnership with the BMW Group will help secure long-term lithium supply for its electric vehicle fleet […] Multi-year, multi-application agreements with premier OEMs, like BMW Group, reflect Livent’s position as a global leader in the lithium industry with a differentiated product offering, proven track record and sustainability profile.”
Right now, LTHM stock has forward P/E and P/S ratios of 154.40 and 7.03, pointing to a frothy valuation. Thus, short-term weakness could be around the corner, especially during this volatile earnings season. Interested investors should be able to find a better entry point at $16 or below.
52-week range: $111.42 – $900.40
One-year price change: Up about 528%
Tesla has become the undisputed EV leader on Wall Street, so it’s a natural pick for this list of electric vehicle stocks. Tesla currently has two vehicle production factories — one in Fremont, California and the other in Shanghai, China — as well as plans for more as the company expands its footprint into places like Europe.
On Apr. 2, Tesla provided an update on its Q1 2021 vehicle production and deliveries. It produced just over 180,000 vehicles and delivered nearly 185,000. Furthermore, management highlighted the reception of some of its EVs, noting, “We are encouraged by the strong reception of the Model Y in China and are quickly progressing to full production capacity. The new Model S and Model X have also been exceptionally well received.” Investors were pleased with the numbers. The next trading day, shares of TSLA stock increased by 4.5%.
That said, a recent research note from Wedbush Securities, which is bullish on Tesla, expressed concern about the current tensions between the U.S. and China and how they could affect tech darlings like it and Apple (NASDAQ:AAPL). Earlier in the year, for instance, the Chinese government clamped down on the use of Tesla vehicles at certain locations.
Of course, TSLA’s price performance has still been remarkable over the past year. Today, though, the stock’s forward P/E and P/S ratios are 159.69 and 13.21, showing a high valuation.
TSLA is an extremely volatile stock, especially intraday. As such, short-term traders should be ready for wild price swings. However, long-term investors could regard any dips in the price as buying opportunities. This company remains a massive disruptor in the EV space.
Volta and Tortoise Acquisition II (SNPR)
52-week range: $9.46 – $18.33
One-year price change: Up about 5.3%
Volta is a new EV charging company which is planning to merge with a special purpose acquisition company (SPAC) called Tortoise Acquisition II. In fact, the two groups recently finalized the deal, which will put Volta on the New York Stock Exchange and have it trade under the ticker “VLTA.” Currently, Volta is becoming increasingly ubiquitous, with charging stations across 23 states.
Typically, EV charging businesses get revenue from reselling electricity sourced from the grid. However, Volta has been in the limelight for its different business model; its charging stations have digital advertising screens. In return, Volta’s charger is free for the first half hour.
So, this name is also a media business, not just a pure EV stock. What’s more, the company has already made agreements with several retailers, including Albertsons (NYSE:ACI), Callaway Golf’s (NYSE:ELY) Topgolf and more. Management highlighted the following about its additional revenue stream:
“These sponsor-supported charging stations provide free energy to customers who are able to plug in their vehicles where and when they shop […] Volta’s business partners who install charging stations experience immediate returns; they report an increase in spend, dwell time and engagement on site.”
As EV penetration grows across the United States, companies like Volta should see significant revenue growth. Volta’s management also expects to extend its operations internationally and become profitable within the next several years. So, depending on your risk-return profile, you might want to put SNPR stock — or later VLTA stock — on your radar of electric vehicle stocks.
52-week range: $17.11 – $74.49
One-year price change: Up about 67% (since September 2020)
Xpeng, a Chinese EV company, is the last of the electric vehicle stocks on this list. Currently, China represents the world’s largest EV market. Moreover, Xpeng is on its way to becoming a big contender in that space, offering vehicles that are integrated with artificial intelligence (AI) and autonomous-driving technologies. Today, the company’s two main vehicles are its G3 SUV and a four-door sports sedan called the P7.
Xpeng, which is backed by Alibaba (NYSE:BABA), posted Q4 and full-year metrics in early March. Quarterly revenue reached $437 million. Net loss was $120.7 million. Finally, quarterly deliveries came to 12,964 vehicles, an increase of nearly 303% YOY. On the results, CEO He Xiaopeng said the following:
“We closed 2020 on a strong note, with a record number of total deliveries in the fourth quarter of 12,964 vehicles, led by the P7, our second Smart EV model, which fueled our robust operational and financial performance throughout the year.”
As of Dec. 31, Xpeng’s physical sales and service network consisted of “160 stores and 54 service centers, covering 69 cities” in the country. However, investors have been betting that this number is likely to increase in the next few years. So, this EV maker deserves to be on your shopping list if you are looking for the next “Tesla of China.” Its market share in the region will likely keep increasing, making XPEV stock a compelling prospect.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.