Electric vehicle stocks have been on quite the ride in recent years. Growth investors have piled into these stocks, with the hopes of outsized returns. And big returns they’ve seen, indeed.
Whether we’re talking about industry-leading Tesla (NASDAQ:TSLA) or any other EV manufacturer, growth has been impressive to watch. From a starting point of roughly zero a decade ago, Tesla and other EV makers have slowly carved out a compelling niche. In fact, domestic EV sales in the U.S. just breached an important threshold of more than 5% of all new car sales this year. In Q2, the number grew from 5.3% to 5.6% of all new cars being sold.
That’s great news for the sector. And despite the allure Tesla carries, there are many other EV makers worth considering for investors taking the long-term view of this sector.
While various headwinds exist in the short-term, here are three intriguing options in the EV sector that appear too cheap to ignore right now.
|F||Ford Motor Company||$13.00|
|SOLO||Electrameccanica Vehicles Corp.||$1.50|
|WKHS||Workhorse Group Inc.||$3.56|
Admittedly, Ford (NYSE:F) isn’t usually the first name that pops up when talking about electric vehicles. However, the car making stalwart is making significant inroads in growing its electric vehicle segment.
One of the largest U.S. auto manufactures, Ford has shifted its focus to an all-electric future via its Ford+ plan. This plan, released during the company’s May 26 Capital Markets Day, outlines a path toward aggressive electrification in the future. This includes more than $30 billion in investments in battery technologies to drive the EV revolution forward.
Indeed, Ford has already stated its goal of EVs making up around 40% of new car sales by 2030. With government benchmarks rising quickly, Ford looks to become a leader in U.S. mainstream adoption of EVs.
Notably, Ford’s aggressive moves into the EV space are going to cost money. Accordingly, investors will want to see a return on investment before diving in. However, should this secular catalyst be as big as everyone thinks, it may be better late than never for Ford. Trading at just 4 times trailing earnings, F stock is very cheap at these levels.
Electrameccanica Vehicles (SOLO)
One of the electric vehicle stocks that benefited most from the surge in growth stocks we saw last year was Electrameccanica Vehicles (NASDAQ:SOLO). This unique maker of custom-built EVs has seen interest surge and wane, resulting in a significantly cheaper valuation for investors.
Still a growth stock, Electrameccanica is a company that may be overlooked. That’s because this EV startup focuses on single-seater and two-seater roadsters. These EVs are aimed at city drivers looking to commute to and from work, with minimal environmental footprint.
My view is that for the EV revolution to succeed, many different vehicles for different consumer segments will be needed. While certainly a niche producer, Electrameccanica could make up a meaningful slice of the growing market. This company does carry higher risk, in that it is still early-stage. However, those looking to put some risk capital to work may want to take a look at SOLO stock, which is down more than 65% from its 52-week high (and much more from its all-time high) at the time of writing.
A line of electric delivery vans is Workhorse’s (NASDAQ:WKHS) claim to fame and it is becoming increasingly popular. Top customers of this electric vehicle company include FedEx (NYSE:FDX), United Parcel Service (NYSE:UPS) and DHL. Again, as a niche producer in what could be a rather diverse electric vehicle market, Workhorse provides some interesting upside for long-term investors in this space.
Notably, Workhorse has also partnered with giant international organizations like Hitachi, Ryder System (NYSE:R) and Duke Energy (NYSE:DUK). These partnerships further the company’s prospects, as investors look to benefit from the increasing political focus on the electrification of delivery fleets.
Now, there has been some concern around Workhorse from short sellers, and the company hasn’t won key bids for postal service contracts. These disappointments have driven WKHS stock well more than 90% lower from its previous peak.
However, for those taking the long view on this niche segment of the electric vehicle market, I think this is another interesting speculative bet, as a small part of a well-balanced portfolio, of course.
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.