7 Stocks Best Positioned to Win the EV Race in 2022


EV stocks - 7 Stocks Best Positioned to Win the EV Race in 2022

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This may be the perfect time to invest in EV stocks. The electric vehicle industry is booming, and its popularity increases with every passing day.

Many governments and cities have introduced regulations to accelerate sustainable mobility, with the global community collectively searching for answers in response to climate change.

Regulators define more stringent emissions targets worldwide to create cleaner air while promoting eco-friendly transportation options like electric vehicles or hydrogen fuel cell cars.

Electric engine-driven machines have many advantages over their gas-powered counterparts, including no emissions and better fuel efficiency.

Along the way, they will have a massive impact on the public markets. All of these new EV companies need finance to become successful. The equity markets are therefore very important to their growth and sustainability.

Considering electric cars are the future, these EV stocks are excellent investments to future-proof your portfolio. Many of these companies had an excellent 2021. So, expect them to keep gaining momentum as we enter the new year.

  • XPeng (NYSE:XPEV)
  • Tesla (NASDAQ:TSLA)
  • Lucid Motors (NASDAQ:LCID)
  • Fisker (NYSE:FSR)
  • Li Auto (NASDAQ:LI)
  • Arrival (NASDAQ:ARVL)

Best Positioned EV Stocks: Nio (NIO)

A Nio (NIO) store at night in Shanghai, China.
Source: Robert Way / Shutterstock.com

Nio has been a disappointment in the last 12 months. During this period, its stock declined by nearly 54%.

The demand for new cars is high, but it has positioned itself to survive and grow despite intense competition. This makes NIO look attractive at current levels.

Nio is keeping its vehicle deliveries robust. The company has also expanded internationally with an initial presence in Norway, and further expansion will continue to spur growth.

The EV maker has also witnessed steady growth in vehicle margin due to an increasing number of deliveries generating cash flows that Nio can use for investments like research and development.

One of the more interesting aspects of Nio is its close association with a local Chinese government. At the height of Covid-19, Nio inked a deal with the municipal government for Hefei to get a bailout of $1 billion in cash injections.

In exchange, NIO expanded its operations and set up a new headquarters in Hefei. The company also plans on furthering its relationship with ecosystem partners while deepening its roots, thereby investing more resources into this area.

All of the entities involved combined to create a new subsidiary called NIO China. Nio seeded the unit with all of its Chinese assets.

Many investors might balk at the close relationship between Nio and the Chinese government, but it can be a source of strength.

Last year, the Chinese government brought down the proverbial regulatory hammer on many companies, including Alibaba (NYSE:BABA). In this environment, having Nio in your portfolio can help the anxiety that occurs with investing in Chinese companies.

XPeng (XPEV)

Image of Xpeng's (XPEV) G3 electric SUV outside a mall in China
Source: Johnnie Rik / Shutterstock.com

XPeng is one of China’s most advanced pure-play new electric vehicle leaders. Their latest models are marketed aggressively to consumers looking for an eco-friendly ride and those seeking performance.

Like Nio and LI, XPeng is a U.S.-listed Chinese electric vehicle player. Over the last year, it has seen a massive increase in total sales numbers.

XPeng’s momentum continues to build; it 15,613 smart EVs in November alone. That’s an unprecedented total, and especially impressive considering their past delivery numbers have increased exponentially.

The year-to-date total for vehicle deliveries jumped to 82,155 by Nov. 30. The figure represents an increase of 285% compared to last year’s figure.

In addition, XPeng is making it easier than ever for people across China to enjoy free supercharging and fast charging services. It has a network of 1,734 chargers now available nationwide, including 550 branded stations.

XPeng posted excellent third-quarter revenue and gave bullish guidance as it grew despite supply chain issues.

XPEV stock soared past a buy point after reporting strong numbers in what was considered an otherwise slow month for auto sales worldwide. The company has seen a significant increase in new customers order rates, intending to meet the demands of these growing businesses.

It also predicts that revenue will grow between 149% and 163% over the last quarter’s figure.

Best Positioned EV Stocks: Tesla (TSLA)

A black Tesla (TSLA) Model S is parked between rows of charging stations.
Source: Grisha Bruev / Shutterstock.com

Hertz (NASDAQ:HTZWW) just announced that they would be ordering 100,000 electric vehicles from Tesla by the end of next year.

Hertz will give their customers the chance to rent out Model 3 sedans in major markets from early November. That helped Tesla gain a valuation of more than $1 trillion.

A large section of investors view TSLA stock as an anomaly. Many believe the current value isn’t reflective of its true worth, while others say they can still see Telsa dominating future industry growth despite recent struggles in sales numbers.

While Tesla still has a way to go in terms of catching up with other automakers when it comes down to production and sales numbers, their products are designed and manufactured using the latest technology available.

It means they’ll be able to provide drivers not only an affordable option but also some truly cutting-edge options as well.

The EV giant is one of the few self-driving car companies that does not use lidar technology.

Instead, it relies on its neural network algorithm to interpret input from cameras and radar for vehicles to perceive what’s happening around them more accurately than ever before. The self-driving business segment can become a money-spinner for the company.

Despite the overvaluation concerns, TSLA continues to deliver. No one can say it’s trading on fundamentals. Nevertheless, when investing in EV stocks, you cannot afford to miss TSLA.

Lucid Motors (LCID)

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

Lucid Motors has been on a roll ever since beginning delivery of their debut Air model at an event in California, but several other catalysts pushed LCID up this year.

First, it kicked off the manufacturing of Lucid Air at the end of September, then, it started delivering cars to consumers.

The Lucid Air Dream Edition was rated with a driving range of 520 miles on full charge by the Environmental Protection Agency.

LCID set an ambitious manufacturing target of 20,000 Lucid Air sedans in 2022. Additionally, CEO Peter Rawlinson said the company wants to spread operations to the Middle East and China.

Finally, there are plans to start commercial sales of an SUV called Gravity in 2023.

All of these developments resulted in much fanfare. Against this backdrop, LCID stock has also done well, with triple-digit gains in the past year. That has led to several calls of overvaluation.

Looking ahead, though, there are several near-term catalysts that you can take advantage of and make a lot of money along the way. Therefore, the time to invest is not over, making it one of the best EV stocks out there.

Best Positioned EV Stocks: Li Auto (LI)

A front view of the Li Xiang One SUV from Li Auto (LI).
Source: Carrie Fereday / Shutterstock.com

Just months after its July 2020 Nasdaq debut, Chinese electric car maker Li Auto skyrocketed by triple digits as Wall Street warmed up to EV stocks.

As with XPeng and NIO, LI holds a listing in America and China. Li Auto has taken a page from XPeng’s book by pursuing a dual primary listing in Hong Kong and the U.S., subjecting their shares to regulations from both countries’ governments rather than just one with secondary listings.

Li Auto is capitalizing on investors’ enthusiasm for electric vehicles by raising money, but it could also be hedging against geopolitical risk as U.S.-China tensions continue.

The new rules by the U.S Securities and Exchange Commission will make it more difficult for foreign companies to list their stocks on American exchanges, which could lead them to be delisted if they don’t come into compliance with these stronger standards.

Chinese electric vehicle maker Li Auto reported stronger-than-expected third-quarter numbers, and investors are mighty pleased.

Li Auto posted adjusted EPS of 3 cents from $1.21 billion in sales, beating Street’s expectations by an impressive margin.

Third-quarter sales have grown 209% from the year-ago period. Li is expecting to deliver between 30,000 and 32,000 cars in the last three months of this year.

“We will further increase our production capacity through the addition of the Beijing manufacturing base, and consistently expand our sales and servicing network to prepare our business growth,” CEO Xiang Li said in the press release unveiling earnings.

Arrival (ARVL)

An electric vehicle charger is seen next to a row of blue electric buses.
Source: BigPixel Photo / Shutterstock.com

The company is known for its approach to producing commercial electric vehicles. It includes buses, vans and cars built quickly and with lower-that-average capital expenditure at micro-factories.

The Rock Hill bus micro-factory will kick off manufacturing in Q2 2022. The factory requires a total capital expenditure of $50 million and is tailored specifically for customer needs with low costs.

The world’s largest logistics company, UPS (NYSE:UPS), ordered 10 thousand electric vehicles from Arrival. This initial order is worth millions in Europe and North America alone.

The UPS has the option to acquire a further 10,000 vehicles. The company also announced an investment in Arrival for an undisclosed amount with its venture capital arm.

However, there are a couple of negative developments weighing down ARVL stock. The third-quarter earnings report is disappointing.

Loss for the period came in at €26 million versus €22 million in the year-ago quarter. Adjusted EBITDA loss of €40 million also compares unfavorably with a loss of €18 million in Q3 2020.

In addition, to raise funds for its ongoing operations, Arrival completed an underwritten public follow-on offering of 37,229,736 ordinary shares to raise around $337.8 million in net proceeds.

On the publication date, Faizan Farooque 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.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.

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