- Tesla (TSLA): The king of EV stocks in the United States is well positioned to benefit from the sector’s growth.
- Honeywell (HON): Honeywell’s alternative to chlorofluorocarbons helps EVs keep cool in a greener way.
- General Motors (GM): GM is “on its way to an all-electric future” and has the strength to back it up.
- Ford Motor Company (F): The more to make EVs their own division shows Ford’s commitment.
- Nividia (NVDA): Chip stocks are slowing down but NVDA is trying to help drive the intelligent car revolution.
- Qualcomm (QCOM): Qualcomm remains devoted to its automotive aspirations through its driver assist system.
- Apple (AAPL): Even if the Apple Car never makes its debut, AAPL is still a strong stock to buy.
Much attention has been devoted to electric vehicles (EV), how many problems they solve and how much fun they are to drive. They take a lot of engineering; research and development; and investment of time and money. And to support those cars, whole industries have sprung up. New EV stocks have arrived and some established companies have joined the EV revolution.
This is happening for many reasons, including global warming, technological advances, and the obvious disadvantages in relying on a dwindling asset — fossil fuel — to make an auto run. But whatever the reasons, the future is clear: the industry will continue to grow.
How big could this transformation be? One report, issued by PolicyAdvice.net, says there were more than 5.6 million EV’s as of last August, up 64% from 3.4 million in 2018. Very big indeed. It quotes other studies saying there were only 1 million registered EVs in the U.S. in 2018; by 2030, there will be approximately 4 million just in California.
Another report, released by International Energy Agency in April, 2021, states that EV registrations globally were up by over 40% in 2020, but they don’t even make up 5% of new sold cars. This leaves a lot of room for growth.
This is not to say that you have to invest directly in electric car makers to benefit from this growth. Companies making computer chips, batteries, special materials, and many other items needed by EVs can get in on the action.
The Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) give investors broad exposure to EV stocks. This should be lower-risk than only holding EV makers.
Following, are some interesting EV stocks in DRIV; according to your risk profile, you may find some to be stocks to buy.
Tesla (NASDAQ:TSLA) is dedicated to designing, developing and manufacturing EVs, batteries, solar roofs and panels, and other products. And as mentioned, it’s a king among EV stocks.
And no wonder. According to InsideEVs, Tesla sold the most battery EVs and plug-in electric vehicles in the world in 2020; TSLA sold 23% of the world’s purely electric EVs and 16% of the plug-in hybrids.
The company also produces storage products for homes and commercial use and is one of the largest suppliers of battery-based energy storage systems in the world. It’s well positioned to benefit from the expected growth in the market.
TSLA is expected to report earnings for Q1 2022 on April 19 and, according to Tipranks.com, the consensus forecast is $2.26 per share; last year in the same quarter the company earned 93 cents per share. That is a good number for TSLA.
Honeywell (NASDAQ:HON) is not often thought of as a technology company, nor among the EV stocks, but it is in the DRIV portfolio for reasons. HON has developed “Solstice” product line, which are fluorine products and are alternatives to chlorofluorocarbons; Chlorofluorocarbons are harmful and contribute to the ozone layer. HON literature states that “Those molecules are found in common products such as car and home air conditioners, aerosols and refrigerators.”
It’s a cleaner way for EVs to cool not only their drivers and passengers, but also many of the technological pieces needed to make EVs run.
They state that they understand complex industrial facilities and create high-quality chemicals and materials — and have been doing it for over 100 years. That’s a reliable company.
TipRanks analysts currently rates HON stock as a buy with a target price of over $221 — an increase of 15% from its current price.
General Motors (GM)
General Motors (NYSE:GM) announced that it is “on its way to an all-electric future, with a commitment to 30 new global electric vehicles by 2025.” The company claims that it is positioned to make EV’s for every style and price and is “rapidly building a competitive advantage in batteries, software, vehicle integration, manufacturing and customer experience.”
The company’s stock is reasonably priced. Morningstar shows a price/forward earnings of 5.75 and a price/earnings to growth ratio of 1.38, which is reasonable, even though its earnings will be down.
TipRanks.com states that GM will report Q1 2022 earnings on April 25, and that it will report $1.67 per share; last year’s same quarter was $2.25.
For its long history and growing participation in the EV future, GM could be considered as a stock to buy.
Ford Motor Company (NYSE:F) threw itself into the center of the EV discussion when it announced earlier this year that it will divide its business operations into two divisions: the internal-combustion-engine business which will be called Ford Blue; and the electric car division under the Ford Model e name. Both of these will fall under the Ford Motor Company operations umbrella.
NPR.org announced that “Ford has seen strong demand for its electric offerings, like the F-150 Lightning and Mustang Mach E.” However, the company also continues to make big profits off of its gas-powered vehicles — especially its large trucks — and doesn’t want to eliminate those just yet.
The company has committed to massively increase its electric vehicle production. Ford says it will build more than 2 million electric vehicles annually by 2026. If it accomplishes that goal, then its EV sales will encompass a full third of the company’s global output.
TipRanks analysts have Ford rated as a buy, with upside of over 30% to their average price target of $21.
Nividia (NASDAQ:NVDA) makes graphics processing units, which are most widely known for aiding with computer graphics. But they can do a lot more — and can be considered among the top EV stocks.
And when it comes to EVs, Nvidia is partnering with many of the biggest names in the business to make sure the future of EVs is intelligent vehicles. NVDA helps those vehicles “be completely programmable with software-driven business models.”
It can also help cars be safer and more efficient.
TipRanks.com reports that for the first quarter of 2023, the consensus forecast earnings per share is $1.30 versus the same quarter last year of 92 cents. This number is based on the ratings of 27 analysts.
The stock has been selling off recently because of weakness in the chip sector, however. William Stein, analyst at Truist Financial, predicts a decline in demand in the semiconductor industry. So make sure you understand broader risks in the sector before investing.
Qualcomm (NASDAQ:QCOM) offers its Qualcomm Snapdragon 5G Mobile Platforms that features a solution for 5G multimode devices. All of the components of their platforms work together to deliver high speeds, superior coverage, and outstanding efficiency, the company stated.
But perhaps of the most interest to anyone reading this article, Qualcomm’s Snapdragon is integrated into the workings of a number of EVs.
The company recently announced it completed its acquisition of Arriver, and believes that it will enhance its ability to ability to deliver open, fully integrated, and competitive Advanced Driver Assistance System (ADAS) solutions to automakers and Tier-1 suppliers at scale. This platform is already set to go in EVs, and with the sector expected to grown, so should demand for the ADAS.
Qualcomm is devoted to these automotive efforts. Nakul Duggal, senior vice president and GM, automotive, Qualcomm Technologies said, “We remain committed to offering advanced solutions for all vehicle tiers and levels and with Arriver’s Driver Assistance assets now part of the Snapdragon Ride™ Platform.”
Apple (NASDAQ:AAPL) is very successful, and many analysts have buy ratings on the stock. This is due to the popularity of its products, its brand strength, and its management performance.
But should you buy their stock now?
If you have a long-time horizon, you understand and expect volatility, and can hold through downturns in the market, then yes. AAPL is a quality stock and it has enough product out there that its cash flow should be solid for the foreseeable future.
As for why it’s on the list and in the DRIV ETF? One prime reason could be the rumors of an Apple Car. While nothing has been confirmed yet, expectations are they Apple is working on a self-driving EV for 2025 or later.
But remember — that’s a rumor, and Apple is a mature company. The risk is that its growth may not match some other companies that you might buy.
The valuation bothers me here, also. Morningstar shows AAPL’s PEG ratio soaring in recent years, though the current ratio has pulled back to 3.19. That’s not to say this ratio for AAPL is not unjustified. I’m just saying AAPL stock might not be a bargain here.
TipRanks.com reports that AAPL is expected to report earnings on April 27. For the second quarter period ending 2022, the consensus expected earnings per share is $1.43; the same quarter last year, the company earned $1.40.
On the date of publication, Max Isaacman 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.