Electric vehicle (EV) stocks have soared to impressive heights this year on mounting demand. As gas prices spiked across the globe in 2022, many consumers responded by switching to more fuel-efficient vehicles. Of course, industry leader Tesla (NASDAQ:TSLA) recently reduced its prices in China, raising concerns about EV demand. But investors shouldn’t be worried about the sector, even in the current bear market. Markets are expected to rebound in 2023, making now a great time to look for the best EV stocks to buy.
Bloomberg reports that demand for EVs has risen so much that some factories are struggling to keep up. The EV sector has also been boosted by government support in 2022. In September, President Joe Biden and his administration invested $900 million to help states establish an EV charging network.
More recently, the White House announced the American Battery Materials Initiative, a program designed to support domestic battery production. This initiative is poised to help EV builders meet production goals in 2023 and beyond. These policies, combined with the Inflation Reduction Act, have left the EV sector well-positioned to keep growing next year.
Of course, not every stock will be a winner in the coming year. There are certainly a few EV stocks that investors should sell. But these seven EV stocks to buy have some of the highest growth potential:
This beaten-down name has had a worse year than most of its EV peers. Arrival (NASDAQ:ARVL) stock has lost more than 65% of its value over the past six months. However, that isn’t necessarily a reason to bet against shares. In fact, ARVL may be this sector’s best buy-the-dip opportunity. As InvestorPlace contributor Larry Ramer reports, the company is making slow-but-steady progress toward becoming profitable.
One month ago, Arrival President Avinash Rugoobur revealed plans to begin testing the company’s vans with United Parcel Services (NYSE:UPS) in the near future. If these two companies can secure a partnership, it will be excellent for Arrival. And this news comes after the shipping giant already ordered 10,000 electric vans from the EV company.
Additionally, the industry landscape looks fairly promising for Arrival. CEO Denis Sverdlov says that demand for the company’s products is significantly outpacing supply. Not only that, but he sees the large electric van space as having “few to no competitors.” If Arrival can find its production footing, it can start to grow.
Arrival recently passed an important milestone when it completed its first van at its Bicester, England microfactory. If completing just one vehicle can send ARVL stock up roughly 20%, think of what scaling production will do for it. Ramer thinks shares can rise 10 times by 2026, especially at the current low price point.
BYD Company (BYDDY)
It’s impossible to ignore a company that threatens a sector leader like Tesla. This past summer, BYD (OTCMKTS:BYDDY) turned many heads when it exceeded Tesla’s global EV sales. The EV stock has the backing of Warren Buffett and, when we consider its recent progress, it’s not hard to see why. Even as further lockdown measures and increased selling pressure push China’s EV sector down, BYD is standing its ground. Experts have praised the company for outperforming Tesla, noting its impressive work to scale battery production as well.
Recently, BYDDY stock rose after the company reported significant growth for Q3 2022. Not only did BYD surge past Tesla in EV sales, but it also estimated that quarterly net profits had likely quadrupled. Per InvestorPlace contributor David Moadel:
“BYD sold 1.2 million EV units during the first nine months of 2022. This growth indicates a 250% YOY increase. In comparison, Tesla apparently sold just over 318,000 EVs during that time frame.”
According to Moadel, on top of its high sales growth and broad product range, BYD has also been able to significantly lower costs. All factors indicate that BYDDY stock may be poised for an excellent year as markets rebound in 2023.
A key component of the green revolution is the need for infrastructure that can keep EVs on the road. Thankfully, the White House has recognized this need, as have many state-level governments. This trend has created highly favorable market conditions for ChargePoint (NYSE:CHPT) stock.
As a leader in EV charging networks, ChargePoint provides charging hardware for both residential and commercial establishments that can power a range of vehicle types. With a presence in 14 countries, ChargePoint also has a truly global reach. More importantly, though, the company is most dominant in the States, where it operates one of the largest U.S. charging networks.
While CHPT stock has struggled like others this season, it is able to boast impressive financials. The company reported its first $100 million quarter in late August 2022, with year-over-year (YOY) growth of 93%. InvestorPlace’s Luke Lango predicts that these growth trends will continue throughout the decade, pointing to CHPT stock as one of the best-positioned picks. InvestorPlace’s Louis Navellier has expressed a similar take.
This EV maker isn’t as flashy as Tesla, but that doesn’t mean it isn’t worth watching. Fisker (NYSE:FSR) has been quietly operating under the radar for months now as it prepares to revolutionize electric SUVs. Recently, the EV startup saw shares rise after completing the first model of its long-awaited Fisker Ocean.
Fisker has confirmed that production will begin this month and that it currently has more than 62,000 reservations. CEO Henrik Fisker also says the company expects to produce 42,000 EVs over the coming year. The company has plans to build a low-cost SUV called the Pear as well, which will be built by Foxconn starting in 2024.
While FSR stock has struggled this year, management doesn’t seem worried. CAO John Finnucan recently purchased 2,350 shares. As InvestorPlace’s Eddie Pan reports, this came after the company announced that it had sold out reservations for the Ocean in only 30 days. All told, Fisker may have gotten off to a fairly slow start as compared to some of its peers, but FSR is set to soar once the company starts converting its long list of reservations into sales.
Lucid Group (LCID)
One of the trendiest names in the EV world, Lucid Group (NASDAQ:LCID) is too cheap to ignore right now. The company has proven that it can compete with Tesla in the luxury EV space, but Luke Lango foresees Lucid even beating the EV leader at its own game. Lango expects the smaller company to increase its market share in the coming years and ultimately outperform Tesla.
Of course, LCID stock has spent most of the year on a downward trajectory. But investors shouldn’t be worried. This company is highly focused on growth and has plans to dramatically expand its reach. Not only does Lucid plan on expanding its U.S. base in Arizona, it also wants to start producing EVs in Saudi Arabia.
These expansion initiatives will take several years to complete. However, current operations likely won’t slow down in the meantime. Lucid has confirmed that it’s on track to meet production guidance for full-year 2022. As one of the top EV stocks to buy, LCID is well-positioned to help lead its sector out of the current bear market.
A relative market newcomer, Polestar (NASDAQ:PSNY) came public in June 2022. Since then, PSNY stock has declined more than 60%. However, part of this decline can be attributed to timing.
It’s hard for any stock to catch fire when it starts trading in a highly volatile market. And as InvestorPlace contributor Chris MacDonald reports, Polestar has given investors plenty of reasons to bet on it. This Sweden-based EV maker is still in startup phase, but it’s further along than many of its competitors. It has also done an impressive job bouncing back after Covid-19 lockdowns in China threatened the EV sector. CEO Thomas Ingenlath recently confirmed that Polestar is on track to meet Q4 delivery goals. The executive expects Q4 to be Polestar’s strongest quarter yet.
PSNY stock is up today on some excellent news as well. Namely, the company just secured $1.6 billion from two primary shareholders — money which will be used to fund growth initiatives in the coming year. This only supports the bullish case for Polestar further.
No list of EV stocks to buy would be complete without at least one battery innovator. And as Luke Lango has emphasized, the EV revolution “won’t go ‘electric’ until we make better batteries.” Lango sees QuantumScape (NYSE:QS) as the company that can make that happen. In fact, the analyst says this solid-state battery producer will perfect the “forever battery” that the EV revolution needs.
Although QuantumScape hasn’t released any batteries yet, it plans on starting commercial production by 2024. That means that, while QS stock may not skyrocket immediately, it’s well-positioned to provide slow-but-steady gains.
QS also has some powerful allies in its corner. For example, the company is backed by Bill Gates and has partnered with Volkswagen (OTCMKTS:VWAGY) for battery testing. As a leader in battery R&D, the EV company is also positioned to benefit from the White House’s recent battery initiative. QS stock is currently priced low enough for investors to buy in and enjoy a season of winning.
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On the date of publication, Samuel O’Brient did not hold (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.