The electric vehicle (EV) sector is one that’s been hit hard of late. Various macro headwinds have hurt the prospects of this growth sector. Everything from rising inflation to worries about rising interest rates have taken EV stocks much lower recently.
However, given the long-term growth trajectory of the EV sector, one might like this recent dip as a potential buying opportunity. Various high-quality growth stocks are now trading at attractive multiples. Or, at least, much more attractive multiples than previously.
The entire EV sector is expected to grow at at CAGR of more than 18% for this decade. As more internal combustion engine vehicles are taken off the road and replaced by electric vehicles, manufacturers with a head start in this space are expected to see their growth rates accelerate over time.
Now, these aforementioned macro headwinds are taking most of the bullish wind out of the sails of this sector. However, despite chip shortages and other exogenous factors, many expect the EV sector to continue to grow at a rapid pace, for a long time.
In this sector, here are a few stocks that may be worth considering right now. Each of these companies is well off their all-time highs, with impressive upside potential over the long-term.
- Fisker (NYSE:FSR)
- Electrameccanica Vehicles (NASDAQ:SOLO)
- Lucid Group (NASDAQ:LCID)
- General Motors (NYSE:GM)
- Proterra (NASDAQ:PTRA)
- ChargePoint Holdings (NYSE:CHPT)
- Blink Charging (NASDAQ:BLNK)
Top EV Stocks: Fisker (FSR)
Volatility in EV stocks has provided a rather difficult investment thesis during times of bearish sentiment. Right now, this bearish sentiment is hurting companies with existing sales. For earlier-stage companies like Fisker, this hit has been even more dramatic. The company’s share price has dipped below $12 per share at the time of writing, approaching Fisker’s SPAC (special purpose acquisition company) IPO price.
Market conditions have generally turned bearish for any speculative growth company. That said, Fisker’s recently-unveiled Ocean SUV is one that’s starting to gain attraction. The company’s base model, Ocean Sport, and high-end model, Ocean Extreme, received positive reviews for their innovative features and low pricing. Given the rising interest in these models, the company already has 23,500 reservations.
Now, reservation numbers are in no way an indication of future demand. Many buyers may be on the sidelines until this company proves itself. However, by all accounts, Fisker could stand a shot at disrupting the lower end of the EV market. Accordingly, aggressive growth investors may want to put this company on the watch list.
ElectraMeccanica Vehicles (SOLO)
Over the past year, shares of this Vancouver-based automobile company have fallen more than 70%. Negative sentiment surrounding SOLO stock has not changed so far in 2022, with declines continuing. However, Electrameccanica’s beat-up condition is why some believe it is oversold and will soon turnaround.
With a base price of $18,500, Electrameccanica sells one of the cheapest EVs in the market. As of November 2021, it had fulfilled 42 deliveries of its three-wheeled single passenger car called SOLO. This model seeks to reduce environmental impact and is aimed at daily commuters who travel alone.
These smaller, three-wheeled vehicles are unique-looking, to say the least. However, for city drivers looking for a cheap and efficient solution for short trips, this company’s product is one that could catch on. Ultimately, time will tell how this company performs. However, we’ve seen how SOLO stock has performed in previous bull markets. This is an aggressive potential high-growth stock investors may want to keep on their radar.
At some point, the risk becomes worth the reward with a company like ElectraMeccanica. We may not be there quite yet. However, this is a unique stock I’ve got on my watch list right now as a high-leverage way to play this sector.
Top EV Stocks: Lucid Group (LCID)
One of the larger-cap speculative EV stocks that investors have gravitated toward of late is Lucid. This company’s massive market capitalization of more than $42 billion at the time of writing is worth noting. That’s because this company has just started to deliver its vehicles. However, in the high-end market, Lucid is often viewed as a Tesla competitor. Given the growth this space has seen, and the margin potential Lucid has, this is a stock that investors have gravitated toward.
Now, LCID stock remains well off its highs seen post IPO. This company has fallen prey to the bearish market conditions surrounding the EV sector. However, the launch of the company’s first model, the Lucid Air Dream Edition in October has gone over well. This car has a range of more than 500 miles, and is the fastest-charging EV in the world. These two factors — range and charging speed — are key drivers many investors point to as reasons to own this stock. In fact, the Lucid Air was able to grab the highly-coveted MotorTrend’s 2022 Car of the Year award.
Even though this company does not try to compete in terms of pricing, its high-quality has already brought 10,000 reservations for Lucid Air. I think this is certainly a speculative EV stock worth a look, for those who want to target the high-end EV market.
General Motors (GM)
Moving away from some more speculative names to a legacy car maker, we have General Motors. This Detroit-based behemoth is the largest automaker in the U.S. This is also a company that’s been on a volatile ride over the past year. This year alone, most of the volatility has been to the downside with GM stock.
That said, this company’s valuation has loosely tracked the EV sector for some time. That’s because GM is making a concerted effort to transition a significant portion of its production to EVs. This electrification trend is going to be expensive, with expected capital spending increases of approximately $35 billion through 2025. However, plans are for GM to produce as many as 400,000 EVs in North America alone this year and next. year.
As far as companies with the existing capabilities, production capacity, and willingness to grow its EV product line, GM is one of the safer picks on this list. Those looking for profitability and solid long-term growth may like what GM stock has to offer.
Top EV Stocks: Proterra (PTRA)
Even though Proterra is not as glamorous or famous as Lucid or General Motors, this company brings with it expertise in manufacturing EV technology. It supplies high-performing batteries to commercial vehicles. Moreover, PTRA is an original-equipment manufacturer (OEM) that has sold more than 700 electric buses and trucks.
Proterra’s stock price has certainly been on the downtrend of late. This EV-related selloff has hit companies on the fringes of the EV movement harder than mainstream players. Accordingly, over the past year, PTRA stock has lost approximately two-thirds of its value.
That said, this is a company with a compelling investment thesis. There is very little competition in Protera’s niche segment. Accordingly, expectations are that this company can eagerly compete in the zero-emission buses segment. This company has already gathered 130 customers, including Duke University and JFK International Airport.
I think Proterra is worth a look at these levels, considering how far it’s fallen. More downside could be on the horizon. However, at some point, stocks like PTRA become too cheap to ignore. I think we’re approaching that point now.
ChargePoint Holdings (CHPT)
Moving away from EV manufacturers to EV infrastructure companies, ChargePoint is among the most prominent EV charging stocks on the market. The company holds the largest online network of EV charging ports, with more than 163,000 chargers located in 14 countries acrund the globe. That said, CHPT stock has lost more than half its value in 2021. Will 2022 be another year like this?
Well, interest around government spending in EV infrastructure has certainly waned. President Joe Biden’s Build Back Better Plan is seemingly dead. With billions in funding earmarked for EV charging now unlikely to materialize, investors appear to have moved on from this sector.
That said, ChargePoint has been leading the way among private companies in providing this service for years. The company expects to increase its chargers aggressively over time, and may be a leader in helping the U.S. reach its goal of 500,000 charging stations by 2030. That is, with or without government support.
ChargePoint is not yet profitable, and profitability concerns remain. However, those bullish on the future of EV charging may want to consider this top dog in the space.
Top EV Stocks: Blink Charging (BLNK)
Perhaps the number two electric vehicle charging stock most investors keep an eye on is Blink Charging. This company’s footprint is much smaller than ChargePoints, with “only” 23,000 charging stations. That said, as the EV market continues to grow toward a potential $23 billion industry by 2028, Blink’s growth potential may be greater than that of its peers.
Now, it’s worth noting that Blink Charging’s growth prospects are also linked to those of General Motors. Both have entered into a deal whereby BLNK will provide EV chargers to GM across the USA and Canada. Moreover, to fulfill the broader goal of becoming environmentally friendly, many businesses are eyeing its Level 2 fast-charging stations.
Furthermore, Blink Charging’s financial performance speaks for itself. In the third quarter, this company’s overall revenue grew 606.6% to $6.4 million. Impressively, the company also reported a gross profit of $0.89 million, which is a 143% year-over-year increase.
Accordingly, those looking for a more aggressive EV charging stock may want to consider Blink right now.
On the date of publication, Chris MacDonald 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.