Electric vehicles are taking over the automotive industry. Automakers from Volkswagen (OTCMKTS:VWAGY) to the Ford Motor Company (NYSE:F) are going all-in on electric cars, trucks and SUVs. By the end of this decade, the majority of vehicles sold globally are forecast to be electric. This represents a major sea change and offers a unique opportunity to investors. Accordingly, many investors are looking for the top EV stocks worth buying in this market of lower valuations.
Indeed, plenty of growth is on the horizon for top EV stocks. It’s expected that the global electric vehicle market will reach $1.32 trillion by 2028, for a compound annual growth rate of 24%, according to data from Fortune Business Insights. Thus, while the electric vehicle market remains volatile, analysts expect EV stocks to takeoff over the next few years as the technologies that underpin it, notably for batteries, advance by leaps and bounds.
Here are three under-the-radar EV stocks with 50% upside potential, according to analysts.
The selloff in shares of electric vehicle market leader Tesla (NASDAQ:TSLA) since the start of December has been ugly. In a little over a month, TSLA stock has declined 30%, bringing its losses over the past year to nearly 70%. Investor sentiment towards the company has soured on the erratic behavior of chief executive officer (CEO) Elon Musk and concerns that Tesla is about to be swept aside by a rising tide of electric vehicle competition.
While many analysts and investors are down on Tesla, the company retains a core group of committed bulls. And, at its current price of around $120 a share, analysts seem to agree that there is significant upside potential with this stock. The 37 analysts who actively cover TSLA stock currently have a median price target on it of $250, which is roughly 100% higher than current levels. Analysts see improving battery technology and new products, such as the highly anticipated Cybertruck, as big catalysts for Tesla and its share price.
Campbell California-based ChargePoint (NYSE:CHPT) represents the other critically-important part of the electric vehicle industry – charging stations. As a majority of the vehicles on our roads become electric, we will need the infrastructure to keep batteries charged. In order for cars, trucks and SUVs to continue running efficiently, charging stations will be needed in people’s homes and on the roads, becoming as commonplace as gas stations are today.
ChargePoint operates the largest network of electric vehicle charging stations in the world, with operations in 14 countries. Its technology is viewed as among the most advanced in the automotive industry. If there’s one EV charging company investors should bet on, it’s ChargePoint.
The company’s stock price has fallen along with the market, declining 33% over the past 12 months to currently trade around $12 per share. That said, analysts predict a rebound. The 19 professionals who cover the company have a median price target on CHPT stock of $18 per share, implying more than 60% upside from here.
Chinese electric vehicle maker Nio (NYSE:NIO) is among the key EV stocks to watch. A leader in China’s electric vehicle market, Nio has emerged as a major challenger to Tesla in Asia. Notably, NIO stock had a spectacular run in 2020 and for most of 2021, but pulled back 60% in 2022 as the company suffered through supply chain bottlenecks and production interruptions due to Covid-19 lockdowns in China. Today, Nio’s stock trades just shy of $12 in New York.
That said, NIO stock looks as though it may have bottomed, given its recent rise of 18% to start 2023. The Shanghai-based company recently announced that it delivered 40,052 vehicles in the three months ended December 2022, up 60% year-over-year. For all of 2022, NIO delivered 122,486 vehicles, an increase of 34% from a year earlier. The 32 analysts who cover Nio have a median price target on its stock of $17.21, which would implies roughly 50% upside from where the stock traded a week ago.
On the date of publication, Joel Baglole 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.