You’d think 2022 would have been a good year for electric vehicle stocks. EV sales hit 2 million globally for the first time in the third quarter, according to PwC, up 75% year over year. Legacy automakers Ford (NYSE:F) and General Motors (NYSE:GM) announced they were making big investments in the sector. And we saw major legislation at the federal and state levels meant to move the U.S. away from gas-powered cars and into the electrified future.
Despite these and myriad other positive headlines for the sector this year, EV stocks have been battered and bruised. This obviously has more to do with the broader bear market and investors’ aversion to growth stocks than it does with the fundamentals of the sector.
According to BloombergNEF, by 2030, more than half of passenger cars sold in the United States will be electric, driven in part by incentives put in place by the Inflation Reduction Act. That’s a significant increase from the 8% expected this year. And adoption rates in other countries, such as China and Norway, are much higher.
With numerous positive tailwinds in play, let’s look at some cheap electric vehicle stocks that are set to accelerate in 2023.
| TSLA | Tesla | $179.05 |
| LAC | Lithium Americas | $23.22 |
| LIT | Global X Lithium & Battery Tech ETF | $66.70 |
| GMET | VanEck Green Metals ETF | $30.77 |
| BLNK | Blink Charging | $12.44 |
| NIO | Nio | $12.63 |
| PTRA | Proterra | $4.96 |
Cheap Electric Vehicle Stocks: Tesla (TSLA)
Tesla (NASDAQ:TSLA) stock, a darling of the previous bull market, has driven straight off a cliff in 2022 with its share price getting cut in half. In fairness, it’s not solely the bear market’s fault. The stock has been hit by production issues and lower-than-expected deliveries. And, of course, there are concerns about CEO Elon Musk’s growing list of distractions.
But don’t count out the king of EVs just yet, though. Despite missing projections, Tesla’s Q3 deliveries came in at a record 343,830, up 42.5% from a year ago. Revenue for the quarter was up 55% year over year, while profits more than doubled. Meanwhile, management is predicting 50% annual growth in vehicle deliveries over the next few years.
The massive pullback in TSLA stock offers a rare chance to pick up shares on the cheap while most investors are hating on the company. In other words, this is the perfect opportunity for contrarian investors to “buy when there’s blood in the streets.”
Lithium Americas (LAC)
Not all of today’s cheap electric vehicle stocks are EV makers. A number of supporting players will benefit from the same demand trends. For instance, according to Barron’s, a single EV requires 22 pounds of lithium.
Unfortunately, lithium is in short supply. The International Energy Agency said we could see lithium shortages by 2025 due to high demand, mining challenges and the concentration of the resource in relatively few places. High demand and limited supply should result in higher lithium prices, representing a strong upside catalyst for lithium miners like Lithium Americas (NYSE:LAC).
Last month, the company announced plans to separate its North American and Argentinian businesses into two companies. The company sees the split as unlocking significant value, allowing both companies to “benefit from strategic focus and enhanced operating flexibility to drive long-term growth and value.”
Lithium Americas’ U.S. business will focus on the Thacker Pass project in Nevada, which, according to the company, is one of the largest lithium resources in the country. The project has reportedly received all state and federal permits needed to begin construction and is moving toward production.
In Argentina, the company plans to ramp up production at its Caucharí-Olaroz project next year to produce 40,000 tons of lithium carbonate a year.
Cheap Electric Vehicle Stocks: Global X Lithium & Battery Tech ETF (LIT)
For those looking to play the lithium demand trend while limiting company-specific risk, consider the Global X Lithium & Battery Tech ETF (NYSE:LIT). The fund invests in the full lithium cycle, from mining and refining to battery production.
Its top holdings include Albemarle (NYSE:ALB), a chemicals company specializing in lithium, and Panasonic (OTC:PCRFY), Samsung and BYD (OTC:BYDDY), which have all entered the lithium battery game. It also holds shares of Lithium Americas and other miners.
LIT is down 21% year to date, hurt by global recession fears. Given time, I believe shares can retake their high above $97 as demand for lithium and lithium batteries increases. From current levels, that would represent a gain of more than 45%. But investors will need plenty of patience.
VanEck Green Metals ETF (GMET)
Another fund for investors looking for cheap electric vehicle stocks to consider is VanEck Green Metals ETF (NYSE:GMET). Launched in November 2021, the fund tracks the Global Clean-Tech Metals Index, which is comprised of companies “involved in the production, refining, processing and recycling of green metals.” According to VanEck, green metals “are metals used in the applications, products and processes that enable the energy transition from fossil fuels to cleaner energy sources and technologies.”
Some of the fund’s top holdings include mining companies Anglo American (OTC:NGLOY), Glencore (OTC:GLNCY) and Freeport-McMoRan (NYSE:FCX). Geographically, the majority of the fund’s assets are concentrated in China, followed by Australia, the U.S. and South Africa.
Shares are down around 12% year to date, outperforming the broader market. If GMET can retake its 52-week high of $38.55, investors will be looking at a 25% gain from current levels.
Cheap Electric Vehicle Stocks: Blink Charging (BLNK)
The EV revolution isn’t just dependent on lithium and batteries; it also needs charging stations. This is why the Biden administration has committed to building out a national network of 500,000 EV charging stations by 2030. We’re also seeing commitments at the state level. For instance, California and New York have allocated millions for local governments to install EV chargers, with more states expected to follow suit.
One clear beneficiary of this trend is Blink Charging (NASDAQ:BLNK), which provides EV charging equipment and networked EV charging services in the U.S. While the company reported a larger-than-expected loss for the third quarter, revenue nearly doubled on a year-over-year basis to $125 million. For the full year, analysts expect revenue to jump more than 175% to $57.7 million, followed by 65% growth in 2023.
BLNK is down 53% year to date, representing an opportunity for investors to pick up shares on the cheap. When the market starts rewarding growth stocks again, BLNK is likely to soar.
Nio (NIO)
Shares of Chinese EV maker Nio (NYSE:NIO) have been savaged, falling 60% in 2022 and more than 80% from their all-time high, made in early 2021. However, the stock is showing signs of life again, rallying 36.5% in just over a month.
According to Deutsche Bank analyst Edison Yu, the worst may be over for Nio regarding supply-chain and production issues. Yu believes delivery numbers will start to show improvement with the December report, predicting deliveries of around 20,000 vehicles. He also expects the Chinese government’s “gradual pivot away from COVID zero” to benefit Nio in the year ahead.
Through the end of November, Nio delivered 106,671 vehicles so far in 2022, up 31.8% from the same period last year. This included a record 14,178 vehicles in November. Along with stronger delivery numbers, the company is expanding in Europe and adding new models.
If shares can regain just half of this year’s down move, climbing back to the $22 level, investors who buy now could see a 74% return.
Cheap Electric Vehicle Stocks: Proterra (PTRA)
Shares of battery electric transit bus maker Proterra (NASDAQ:PTRA) are down 44% so far in 2022, struggling despite some positive developments for the company. School districts around the country are turning to Porterra’s electric school buses as they look to cut emissions.
This trend is likely to persist, as the Bipartisan Infrastructure Law, passed earlier this year, allocates $5 billion over five years for a clean school bus program to help school districts transition to mostly electric fleets.
For the third quarter, Proterra posted a wider-than-expected loss. However, revenue of $96 million was up about 55% year over year and better than analysts were expecting. The company delivered 60 new buses for the quarter, up 15% compared with a year ago.
Analysts predict revenue growth of 31% this year and 69% next year, accompanied by narrowing losses. In short, the future looks bright for this cheap electric vehicle stock with a long growth runway.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
