- Turbulence in the equities markets pressured growth stocks, creating opportunities to invest in worthy electric vehicle stocks.
- Tesla (TSLA): The leading EV stock outpaced analysts’ expectations and the recent sell-off is excessive, providing a good entry point for long-term investors.
- Lucid Motors (LCID): Sales ramp up and the announcement of the largest-ever purchase agreement over 10 years makes LCID a stock to have on your EV stocks list.
- Rivian Automotive (RIVN): Tough market conditions weighed on the stock, creating an affordable entry point to enter this fast-growing EV specialist.
- Nio (NIO): The Chinese EV stock can be a great investment for EV geographical diversification, especially due to its valuation discount.
- XPeng (XPEV): The beaten-down Chinese EV stock grows at a rapid pace and has elevated upside potential in the next 12 months.
- Ford Motor (F): Strong demand for its EV vehicles and an ambitious EV transition goals make this established carmaker a great investment in the long-term
- ChargePoint (CHPT): The leading EV charging specialist is set to accelerate its development and is a great investment to diversify your EV exposure.
The EV industry is slowly maturing and numerous EV companies are trying to take a chunk of this booming market. While the list of EV stocks is extensive, not all of these companies should be on your electric vehicle stocks list.
The global electric vehicle (EV) market has gained traction in the past years, as awareness of the impacts of climate change lifted. To ease the transition toward clean transportation solutions and help citizens embrace clean energy vehicles, government incentives were lifted, sustaining the development of the industry. Demand for the global EV market is projected to remain strong in the following years and according to Facts & Factors, the market size should grow at a compound annual growth rate of 24.5% between 2022 and 2028 to a total value of $980 billion.
Most of the stocks in the electric vehicle space have been beaten down in the past few months as turbulence in the markets soared. Yet, the industry is poised for secular growth which should reward long-term investors. With that in mind, here are the most worthy names to invest in that should be on any electric vehicle stocks list.
|LCID||Lucid Group, Inc.||$19.63|
|RIVN||Rivian Automotive, Inc.||$32.49|
|F||Ford Motor Company||$14.70|
|CHPT||ChargePoint Holdings, Inc.||$13.52|
Tesla (NASDAQ:TSLA), one of the most-renowned electric vehicle stocks, with a leading position on the market. TSLA stock delivered a strong performance in the past year, gaining 29.62%.
Recently, the acquisition of Twitter for $44 billion by Tesla’s CEO, Elon Musk, has triggered a sell-off of its stock, offering a cheaper entry point for the EV leader. The market reaction seems exaggerated, given Tesla’s untouched fundamentals and strong track record.
In the last four quarters, TSLA outpaced analysts’ earnings per share and revenue estimates, managing with ease to respond to lifting EV demand, while controlling supply chain problems. Besides, the EV specialist is expected to continue to grow at a fast clip. Revenues are estimated to advance 61.1% to $86.7 billion in 2022, whereas net profits are forecasted to inflate 131% to $12.7 billion.
TSLA offers a high-profit margin of 14.7% to its shareholders and despite high valuation multiples, the recent sell-off offers a good entry point for long-term investors. TSLA stock is currently exchanging at an overvalued 2022e price-to-book ratio of 21.9x and posts a forward EV/EBITDA of 42.1x.
Lucid Motors (LCID)
Lucid Motors (NYSE:LCID) is a startup EV company. LCID recently started electric vehicle deliveries and is set to ramp up sales considerably this year. LCID stock dipped more than 50% since the beginning of the year and is down 30.96% to $18.89 per share in the last month.
The EV stock manufactures luxury electric cars with long-range and fast-charging capabilities, setting new standards in the EV space. Recently, LCID announced one of the largest-ever purchase commitments for sustainable electric vehicles with the Government of Saudi Arabia. The deal to purchase 100,000 vehicles in the next 10 years is a constructive catalyst for the EV stock.
While deliveries should only begin in the second quarter of 2023, LCID’s revenues are expected to extend 377.9% in 2022 to $1.29, amid strong demand for its electric cars. However, the stock is still in a bearish trend and could see further selling pressure in the next months, due to high valuation metrics that stand at a forward EV/Revenue of 24x and 15.1x forward P/B.
LCID stock might be the next Tesla in the following years and investors should consider adding it to their EV list. Besides, analysts offer an upside of 114.4% on LCID stock, with an average target price of $40.5 per share.
Rivian Automotive (RIVN)
Rivian Automotive (NASDAQ:RIVN) is another must-have EV company that should be on any EV stocks list. The EV stock is also stepping up EV deliveries and has already produced 2,553 vehicles in Q1 2022. RIVN stock has however disappointed, following the 68.55% to $32.18 per share it registered since it started trading on the NASDAQ.
RIVN needs more time to deliver and 2022 could be the turning point that EV investors are looking for. The company is backed by Ford and Amazon’s substantial stakes, conferring confidence on RIVN’s ability to take a chunk of the fast-growing EV market.
Despite that, Rivian is still profitless and its bottom line is expected to deteriorate this year, posting an estimated net loss of $6.15 billion. On the other side, net sales are set to bounce 250% in 2022 to $1.92 billion.
RIVN’s sell-off offers an attractive price to enter this EV start-up. The valuation metrics are more affordable than other peers in our electric vehicle stocks list, trading at a forward EV/Revenue of 15x and a 2022e P/B of 1.99x. In addition, the average target price of $70.77 per share offered by Wall Street analysts is attractive, corresponding to a 12-month upside of 119.92%.
Nio (NYSE:NIO) is a Chinese EV pioneer and a leading premium smart electric vehicle company, ahead of its smaller rivals as to EV deliveries. NIO stock updates vehicle deliveries on April 1, posting a record high figure of 9,985 delivered vehicles for March, an increase of 37.6% year-on-year. This positive announcement has not stopped the downward momentum on Nio’s shares, falling 49.42% to $16.93 per share over the year.
Demand for EV cars in China remains strong and NIO is well-positioned to benefit from it. The company is close to reaching an important milestone, with cumulative EV deliveries approaching the 200,000 thresholds in March 2022.
With these solid figures, NIO’s top-line growth is projected to surge 74.1% to CNY 62.9 billion in 2022, whereas net loss is expected to be slashed in half this year to CNY -5.47 billion ($827.74 billion) . Despite being profitless, NIO’s cash position is solid, with an expected amount of CNY 18.2 billion in 2022, down 51.2% year-on-year.
The Chinese EV stock can be a great investment for EV geographical diversification, especially due to its discount. It currently exchanges at a low forward EV/revenue of 2.66x and a 2022e P/B of 6.42x.
Xpeng (NYSE:XPEV) is another Chinese EV carmaker, managing to enter the highly competitive automotive market, defined by high entry barrier costs. XPEV stock is also on the list of beaten-down EV stocks, after the 52.1% to $24.08 per share dip registered since the beginning of the year.
XPEV is growing at a rapid pace, with total EV deliveries jumping 63% quarter-on-quarter to 41,751 in Q4 2021. Top-line is expected to expand heftily in 2022, up 102% to CNY 42.4 billion and by 64.8% to CNY 69.9 billion in 2023. On the other side, net income is projected to deteriorate, from a negative figure of CNY 4.86 billion in 2021 to a net loss of CNY 6.59 billion this year.
Nevertheless, the EV stock is an opportunity at its current price, trading at cheap metrics of only 3.01x forward EV/Revenue and 4.43x 2022e P/B. The consensus of analysts delivers an average target price on XPEV’s equity story of $45.16 per share, representing an implied appreciation of 87.54% in the next 12 months.
Ford Motor (F)
Ford Motor (NYSE:F) is an established automaker that is investing massively to transition to full EV production. F stock posted a strong yearly performance, advancing 29.84%, but the share price has withdrawn 32.84% to $14.62 per share year-to-date.
The company has been impacted by growing supply chain constraint that has impacted production over the past quarter, but strong demand for Ford’s EV vehicles remains robust. Ford has ambitious goals and ‘has committed to reaching worldwide EV manufacturing capacity of at least 600,000 vehicles by the end of 2023, for which it’s ramping up battery supplies, on the way to making more than two million EVs annually by the end of 2026.
Despite that, the company posted a net loss of $3.1 billion in the last quarter, due to the loss on the valuation of investment in Rivian. Nevertheless, the mature automaker is trading at attractive multiples, exchanging at a forward EV/EBITDA of 3.09x and 18.8x 2022e P/E. Besides, it is expected to deliver a dividend yield of 2.74% in 2022, making it a worthy-buy name to put on your electric vehicle stocks list.
Chargepoint (NYSE:CHPT) is a leading electric vehicle charging technology solutions provider and is creating a fueling network in North America and Europe. CHPT stock is down 34.88% year-to-date to $12.94 per share and lost more than 45% of its market capitalization over the past year. The company recently partnered with Goldman Sachs to introduce new tailored financing solutions to reduce upfront costs of EV charging technology and raised $300 million through the purchase by Antara Capital LP of 3.5% / 5% convertible senior notes due in 2027.
These proceeds will contribute to sustaining the strong growth rate of the EV charging specialist. After a flattish progression in 2021, net sales are expected to jump 65.8% in 2022 to $242 million and 91.7% to $464 million in 2023. Despite these robust figures, CHPT stock is not expected to deliver a profit in the next three years and net loss is forecasted to attain $299 million this year.
The company had a cash position of $111 million at the end of 2021 that is estimated to expand to $315 million this year. In addition, Chargepoint exchanges at high multiples, with a forward EV/Revenue of 17.6x and an elevated 2022e P/B ratio of 4.81x. This growth stock might continue to witness turbulence in the near term, but the leading EV charging specialist has an upside potential of 89.95% in the next 12 months and is a great investment to diversify your EV exposure.
On the date of publication, Cristian Docan 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.