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3 EV Stocks That Could Win the Electric Vehicle Revolution

EV stocks - 3 EV Stocks That Could Win the Electric Vehicle Revolution

Source: Shutterstock

The electric vehicle market remains strong and is forecast to reach $917 billion globally in 2028, for a compound annual growth rate (CAGR) of 20.6%, according to market research firm Reports and Data.

“A green revolution in daily travel has begun. Battery-powered cars are selling fast, and automakers — nudged by governments — are phasing out gas vehicles,” National Geographic wrote last month.

And while there continues to be new entrants into the EV space all the time, a handful of manufacturers have set themselves apart as best of breed in the sector. These are companies that are now in full production of electric vehicles and exceeding the delivery targets that Wall Street has set for them.

In coming years, these few companies are likely to continue dominating and leading in the electric vehicle market. Here are three EV stocks that could win the electric vehicle revolution that is now underway.

  • Lucid Motors (NASDAQ:LCID)
  • Nio (NYSE:NIO)
  • Tesla (NASDAQ:TSLA)

EV Stocks That Could Win the Revolution: Lucid Motors (LCID)

A photo of the Lucid Motors Air EV from 2018.
Source: ggTravelDiary / Shutterstock.com

It’s only been publicly traded since July 26 of this year, but Newark, California-based Lucid Motors is a compelling electric vehicle stock. The most compelling thing about Lucid Motors is that the company is, this month (October), delivering its very first electric vehicles, which have just rolled off the assembly line.

The Lucid Air is a luxury electric vehicle that retails for as much as $150,000, just one data point that shows, as National Geographic wrote, “most new EVs are luxury cars that few can afford.” “But investment bank UBS and research firm BloombergNEF predict that electric cars could reach cost parity with conventional vehicles in five years or so.”

In addition to the luxury interior, owners get an electric sedan that can travel 520 miles on a single battery charge, giving it the longest range ever for an electric vehicle. Analysts see Lucid Air as being a legitimate threat to current market leader Tesla.

Lucid Motors is ramping up production quickly. The company has said that it will produce 20,000 vehicles and generate $2.22 billion in revenue next year (2022), but plans to quickly accelerate to 251,000 vehicles produced and $22.8 billion in revenue by 2026.

Lucid Motors currently has 13,000 pre-orders for its electric Air sedan. The fact that the company is delivering vehicles puts it light years ahead of most other electric vehicle companies.

Since its Nasdaq debut, LCID stock has fallen 7% to $24.84 per share. But it likely won’t be long before the share price climbs higher. Investors should grab the stock while it’s still below $25.

Nio (NIO)

A close-up shot of the Nio (NIO) ES8 vehicle.
Source: xiaorui / Shutterstock.com

After stagnating for most of the year, shares of Chinese electric vehicle maker Nio are suddenly red hot. In the past month, NIO stock has risen 13%, with 10% of that gain coming between Oct. 15 and 20. Nio’s share price currently sits at a hair under $40.

Propelling the shares higher has been an upgrade from investment bank Goldman Sachs, which slapped a “buy” rating on the stock and forecast that it could rise more than 60% to $56 per share. The Goldman upgrade came after Nio announced that it is on track to complete construction of its new manufacturing plant in Hefei, China, on time and on budget.

The new plant will give Nio the capability to make 300,000 vehicles a year. That’s an upgrade from the 240,000 electric cars that Nio originally estimated its new plant would produce annually. The additional manufacturing capacity comes as Nio reports much better-than-expected deliveries and expands into Europe.

For September, Nio reported that it delivered 10,628 vehicles during the month, marking a year-over-year increase of 125.7%. And the Chinese EV maker has just expanded into Norway, its first foray outside of its home turf, and announced plans to begin sales in Germany in 2022. Nio is rapidly positioning itself to be a global player in the electric vehicle space.

EV Stocks That Could Win the Revolution: Tesla (TSLA)

Tesla (TSLA) badge on steering wheel of car
Source: Christopher Lyzcen / Shutterstock.com

Reigning market leader Tesla is another stock that seems to have gotten its mojo back. In the past month, the electric vehicle makers’ share price has increased an impressive 19% to currently trade at around $866. The stock had been near $560 a share this past spring.

The latest rally comes following a slate of good news for the electric vehicle maker that is run by mercurial founder and CEO Elon Musk. The company announced in early October that it delivered a record 241,000 vehicles in this year’s third quarter, roughly 40,000 more vehicles than in the previous quarter. This despite the global semiconductor shortage that has hobbled other automotive manufacturers.

“While chip shortages dragging on production and inventory is the biggest factor in the drop in sales for traditional automakers, the loss of share to EV makers (mostly Tesla) is no doubt compounding the delivery decline for the broader industry,” Loup Funds’ Gene Munster and David Stokman wrote earlier this month.

Additionally, several analysts and well-known investors have raised their price targets on TSLA stock. And Michael Burry of “The Big Short” fame has said that he no longer holds a short position in the company’s stock. Burry had long been one of the most high-profile and vocal critics of Tesla’s stock valuation.

As the company moves its headquarters to Austin, Texas and begins deliveries on it new Model X Long Range that boasts six seats, now is a good time to take a position in Tesla stock. While the company faces rising competition from the likes of Lucid Air and Nio, it still remains the global leader when it comes to electric vehicles.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

Article printed from InvestorPlace Media, https://investorplace.com/2021/10/3-ev-stocks-that-could-win-the-electric-vehicle-revolution/.

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