Electric vehicle (EV) stocks have fallen prey to the sell-off in tech shares in recent months. For instance, the S&P Kensho Electric Vehicles Index is down about 28% in the past year. As a result, well-known EV names with steep valuations are now trading significantly lower. Therefore, investors wonder whether February could be a good month to invest in EV shares.
Despite the decline in prices of electric vehicle stocks, auto sales are strong. Data from LMC Automotive reveals that about 4.5 million battery EVs were sold in 2021, over double the number in 2021 and about triple the sales figure in 2019. The global market for battery electric vehicles is now estimated to be $64 billion, but Statista predicts it could soar to $212 billion by 2030.
Meanwhile nations as well as cities worldwide have stepped up their clean energy and e-mobility targets. As a result, legacy automakers are shifting production towards EVs.
While we may see significant volatility in EV stocks in the short term, the recent sell-off offers buy-and-hold investors an opportunity to buy these names at attractive discounts. With that said, here are seven electric vehicle stocks to watch in 2022:
- Fisker (NYSE:FSR)
- Li Auto (NASDAQ:LI)
- Lucid Group (NASDAQ:LCID)
- Nio (NYSE:NIO)
- Rivian Automotive (NASDAQ:RIVN)
- Tesla (NASDAQ:TSLA)
- XPeng (NYSE:XPEV)
Electric Vehicle Stocks: Fisker (FSR)
52-week range: $9.61 – $31.96
Manhattan Beach, California-based Fisker is a pre-revenue EV manufacturer. Its asset-light business model based on contract manufacturing has attracted Wall Street’s attention.
Production for Fisker Ocean, its premium SUV, is set to start in November 2022. This EV is sold exclusively through the Fisker app or the website without a dealer network.
Fisker released Q3 2021 results in early November. Net loss came in at $110 million, or 37 cents loss per share, compared to a net loss of $40 million in the prior-year quarter. Cash and equivalents ended the period at $1.40 billion.
As of Jan. 2, the EV maker confirmed it had more than 23,500 reservations for Fisker Ocean, up almost 120% year-over-year (YOY). The EV will come with advanced driver-assist systems that use digital radar imaging sensors. Fisker estimates that the average selling price for its EVs will be over $55,000, which implies more than $1.3 billion in potential revenue.
Currently, Fisker is a speculative EV play, trading at a significant discount compared to its peers. FSR stock hovers around $11.39, down 24% over the past year. The recent market sell-off pushed the stock price down by 29% year-to-date (YTD). The 12-month median price forecast for Fisker stock stands at $25.50.
Li Auto (LI)
52-week range: $15.98 – $37.45
Li Auto is a Chinese EV group, focusing on smart electric SUVs. At present, its only vehicle model is the Li One, a six-seat electric SUV.
In October 2021, Li announced the start of the construction of its Beijing manufacturing base. A month later, the EV maker announced the acquisition of Changzhou Chehejin Standard Factory. This new manufacturing facility will have a production capacity of 100,000 EVs per year.
The automotive group announced Q3 2021 numbers on Nov. 29. Revenue increased 210% YOY to $1.21 billion. Net income stood at $52.1 million, or three cents per diluted share, compared to $2.5 million in the prior-year quarter. Cash and equivalents ended the period at $7.58 billion.
Analysts noted the robust demand for the Li-One SUV. Fourth-quarter deliveries increased more than 140% YOY to 35,221. The growth in its manufacturing base and possible international expansion plans are primed to accelerate growth in 2022 further.
LI stock is currently priced slightly over $25, down 15% YTD. Shares are trading at 9.4 times trailing sales, lower than comparable numbers for other Chinese names Xpeng and Nio. The 12-month median price forecast for Li stock is $45.05.
Electric Vehicle Stocks: Lucid Group (LCID)
52-week range: $16.12 – $64.86
Newark, California-based Lucid Group is a pre-revenue luxury EV maker. Management has not been shy about its ambitions to challenge Tesla’s dominant market share.
Lucid’s first model, Lucid Air, is a high-performance, ultra-efficient luxury EV sedan. It has a 520-mile range on a single charge, the longest range achieved in EVs.
Management announced Q3 2021 results on Nov. 15. Net loss widened to $524 million, compared to $161 million in the prior-year quarter. Cash and equivalents ended the period at $4.8 billion.
Lucid Air started production in October. The company ended the third quarter with total orders roughly at $1.3 billion.
Looking ahead, CEO Peter Rawlinson remarked, “We see significant demand for the award-winning Lucid Air, with accelerating reservations as we ramp production at our factory in Arizona. We remain confident in our ability to achieve 20,000 units in 2022.” Analysts estimate that the delivery of 20,000 vehicles in 2022 implies roughly $2.2 billion in revenue.
LCID is a speculative stock that sells for $27, up 22 % over the past year. However, the recent sell-off pulled its stock price down 29% YTD. The 12-month median price forecast for Lucid stock stands at $57.
52-week range: $19.31 – $64.60
Nio is another widely-followed Chinese car group that manufactures smart EVs. Management highlights battery services, autonomous driving, and artificial intelligence (AI) technologies as selling points for their cars. Drivers seem to enjoy charging solutions for the home as well as Power Swap, the battery swapping service.
The EV manufacturer announced Q3 2021 results on Nov. 9. Revenue increased 117% YOY to $1.52 billion. Net loss narrowed to $88.4 million, or six cents per diluted share, down from $156 million in the prior-year quarter. Cash and equivalents ended the period at $7.3 billion.
Nio delivered 91,429 vehicles in 2021, up 109% YOY. The company is currently introducing three new EV models that could lead to a significant increase in sales in future quarters. It has also entered Europe via Norway. So the future could be bright for the Chinese group.
NIO stock hovers slightly above $21, down 57% over the past year. The recent sell-off meant a decline of 25% YTD. Shares are trading at 6.7 times trailing sales. The 12-month median price forecast for Nio stock is $58.28.
Electric Vehicle Stocks: Rivian Automotive (RIVN)
52-week range: $50.00 – $179.47
Irvine, California-based Rivian Automotive focuses on pick-up trucks, SUVs, and commercial delivery vans. The pre-revenue name has three EVs set to launch simultaneously in 2022. Both Amazon.com (NASDAQ:AMZN) and Ford Motor (NYSE:F) hold minority stakes in the car maker.
Rivian released Q3 2021 results on Dec. 16. Net loss widened to $1.23 billion, or $12.21 loss per diluted share, up from $288 million for the same period last year. Cash and equivalents ended the period at $5.16 billion.
Amazon has ordered 100,000 Rivian vans to be delivered until 2030, including 10,000 in 2022. As of Dec. 15, Rivian boasts roughly 71,000 preorders for its R1T and R1S trucks. The EV maker currently has an annual capacity to produce 150,000 vehicles at its Illinois factory.
Additionally, Rivian has announced a second manufacturing plant to be located in Georgia. Once ramped, this new facility will have the capacity to produce up to 400,000 vehicles per year.
RIVN stock currently trades slightly above $59, down 43% YTD. The recent decline looks like a buying opportunity for those who can tolerate short-term volatility. The 12-month median price forecast for Rivian stock stands at $130.
52-week range: $539.49 – $1,243.49
Over the past several year, Tesla has become a global leader in EVs. The company also manufactures solar panels for energy generation as well as batteries for stationary storage.
Tesla issued Q4 2021 financials on Jan. 26. Revenue increased 65% YOY to $17.7 billion. Net income came in at $2.88 billion, or $2.54 per diluted share, up from $903 million, or 80 cents per diluted share, a year ago. Cash and equivalents ended the period at $17.58 billion.
The EV leader delivered around 936,000 vehicles in 2021, representing an 87% YOY increase. Management plans to increase output at its existing factories in California and Shanghai while ramping up production at new factories in Austin and Berlin.
CEO Elon Musk believes a 50% growth is highly possible in 2022. However, supply chain issues could mean headwinds. In fact, Tesla will not introduce any new models soon.
TSLA stock currently hovers around $912, down 14% YTD. Despite the recent sell-off, Tesla has an expensive valuation at 100 times forward earnings and 22.7 times trailing sales. The 12-month median price forecast for Tesla stock stands at $1047.
Electric Vehicle Stocks: XPeng (XPEV)
52-week range: $22.73 – $56.45
Our last stock also comes from China. XPeng manufactures smart EVs integrated with AI and autonomous driving technologies. The group targets the mid-to-high-end segment in the county. Currently, it offers three models: the P7 sports sedan, the P5 family sedan, and the G3 SUV.
XPeng released Q3 2021 metrics on Nov. 23. Revenue increased 187% YOY to $888 million. Net loss widened to $247.5 million, or 29 cents per diluted share, up from $178 million in the prior-year quarter. Cash and equivalents ended the quarter at $2.39 billion.
The EV name sold 98,155 EVs in 2021, up 263% YOY. In December 2021 alone, XPeng delivered 16,000 vehicles, fueled by strong sales of P7 and a production ramp of P5 models.
Given the robust growth in the Chinese EV market, XPeng is well-positioned to increase sales in the coming year. Over the long-run, the company’s ambition in robotics, autonomous driving, and even flying vehicles could create even more shareholder value than the EV business.
XPEV stock hovers around $35, down 30% YTD. Shares are trading at 16.4 times trailing sales. The 12-month median price forecast for Xpeng stock stands at $58.79.
On the date of publication, Tezcan Gecgil 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.
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.