The electric vehicle (EV) industry is at the heart of the worldwide push towards a more sustainable future. As countries work towards reducing their carbon footprints, the demand for EVs is expected to increase aggressively. However, investors need to differentiate between true innovators and mere players in the field, thereby investing in the best EV stocks to buy to optimize their returns effectively.
Not every EV stock is set to succeed, especially with potential economic uncertainties on the horizon. However, there are still some promising EV stocks out there that seem well-equipped to handle challenging economic conditions. Having said that, let’s explore three top EV stocks that stand out in the crowd. These selections aren’t just about investing in EV stocks, as they reflect a potent strategy to align with and profit from the growth of sustainable transportation.
EV Stocks To Buy: Tesla (TSLA)
Tesla (NASDAQ:TSLA) stumbled following its April earnings report after lower pricing contributed to a considerable margin miss. Nevertheless, it delivered a whopping 422,875 vehicles during the first quarter, speeding past deliveries of 310,000 in the same quarter last year.
A deep dive into its core financials showcases the strength of its robust balance sheet, with the firm reporting an impressive $16 billion in cash and equivalents for the first quarter, alongside a healthy operating cash flow of $2.5 billion. These figures suggest that its cash flow situation remains mighty impressive despite the pricing.
As we advance, the EV giant aims to sell 20 million vehicles annually by 2030, providing an exciting runway for potential cash flow enhancement and value creation. Moreover, it will now have its founder Elon Musk back in the thick of things after focusing its efforts on Twitter for the past several months. His renewed commitment, coupled with a fresh take on advertising and the much-anticipated launch of Cybertruck later this year, signals an invigorating phase for Tesla.
Nio (NYSE:NIO) is a leading Chinese electric vehicle behemoth that has consistently posted record deliveries each quarter. Until December, it experienced a massive surge in deliveries; but has lost some of its steam this year. First-quarter deliveries showcased a year-on-year bump, and a price war in China had a notable impact, resulting in a sequential fall of nearly 23%. This is largely attributed to customers delaying purchases hoping to capitalize on anticipated price reductions.
Despite these challenges, Nio has been effectively navigating its transition phase, commencing deliveries of its new coupe SUV, the EC7, ahead of schedule while unveiling its 2023 ET7 sedan at the Shanghai Auto Show in April. Hence, the EV giant seems poised for an influx of fresh orders ahead.
As it readies to launch its upgraded models, CEO William Li projects a doubling of sales compared to last year, positioning Nio for outsized gains ahead.
ChargePoint (NYSE:CHPT) has established a global presence as a renowned provider of EV charging stations, boasting a significant presence in 14 countries globally, including the largest EV charging network in the U.S. Moreover, as the shift towards EVs gains momentum, the firm finds itself in an advantageous position to capitalize on the growing demand for charging stations. As we advance, the firm targets ambitious revenue growth of more than 60% in the upcoming years.
With a notable footprint in both the U.S. and Europe, ChargePoint operates “hundreds of thousands” of charging spots. On top of that, it caters to an impressive 80% of Fortune 50 companies that offer sustained revenue and profits as the corporate giants expand its fleet. Despite market volatility, ChargePoint’s proven success in its field suggests profitability within the next three years.
On the publication date, Muslim Farooque did not have (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