The electric vehicle (EV) sector, once seen as a profitable growth area, has faced recent setbacks and underperformance. However, not all EV stocks can be winners, and the sector’s resilience will ultimately separate the promising stocks from the rest.
Investing in EV stocks with growth potential can be a rewarding journey despite the challenges. The global EV market is projected to reach $1.4 trillion by 2027, providing a lucrative opportunity for investors.
Here are three high-potential EV stocks to consider for your portfolio.
Byd Co. (BYDDF)
BYD Co. (OTCMKTS:BYDDF), a prominent Tesla competitor, is gaining momentum with its new EV brand, Fang Cheng Bao. With backing from Warren Buffet, the company aims to launch its first model this year, expanding its product lineup from sports cars to off-road vehicles. BYD has already experienced impressive sales, with 996,476 cars sold in the first five months of this year, nearly twice the number from the previous year. As a result, BYD stock stands out as a top long-term investment in the EV sector.
BYD Co. is making strides in both domestic and international markets with its EV offerings. In addition to vehicle production, the company is a major player in EV battery manufacturing, with plans to expand production in Zhengzhou. BYD’s growing market share and product quality position it well in the global EV market, particularly in China’s influential role.
BYD’s success extends beyond vehicle production as it also excels in EV battery manufacturing. The company is poised to capitalize on the increasing demand for EV batteries in the global market. BYD’s impressive growth in the first quarter, with record-breaking deliveries and soaring net profit, highlights its potential to reshape the EV industry. With ambitious plans to sell 4 million plug-in EVs in 2023, BYD is set for substantial growth.
Nio (NIO)
Despite facing a prolonged downtrend, Nio (NYSE:NIO) stock caught attention when the Chinese government extended tax exemptions for electric vehicles. However, the initial excitement was dampened by disappointing May delivery figures, with sales dropping significantly compared to December. Nio, known as the “Tesla of China,” has gained recognition for its focus on premium EVs and services.
NIO delivered 31,041 vehicles in Q1 2023, showcasing strong performance. Analysts foresee a significant 95% potential upside for the stock, attributed to positive management guidance and the expected economic recovery in China.
Nio is benefiting from favorable factors such as expansion into the European market, upcoming product launches, and increasing car deliveries. The company’s diverse lineup and battery-swapping stations contribute to its strength in the EV sector. These developments position Nio as a promising long-term investment with strong growth potential.
ChargePoint (CHPT)
ChargePoint (NYSE:CHPT), a top charging infrastructure provider, has solidified its position in the North American market with its asset-light B2B model. The company’s impressive first-quarter results showed a remarkable 102% increase in revenue, reaching $81.6 million. Investors have praised ChargePoint for its strong performance and growth.
Furthermore, with a strong emphasis on profitability, ChargePoint aims to reduce its EBITDA loss significantly by the fourth quarter compared to the first quarter. If the company achieves the midpoint of its second-quarter guidance, it could experience a substantial 41% year-over-year increase in sales. Analysts at Tipranks predict a potential upside from the current price levels, adding to the positive outlook for ChargePoint.
JPMorgan’s recent investor note highlighted that ChargePoint’s strong performance in its fleet and European segments compensated for slightly weaker commercial and residential demand. The bank believes that ChargePoint is on track to generate positive free cash flow by the end of next year and has reiterated an “overweight” rating on the stock.
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.
