The global automotive industry is shifting to electric vehicles (EVs). This isn’t a temporary phase. The market could hit $1.3 trillion by decade’s end. As EV demand soars, many manufacturers join the race. This then leads to EV stocks for retirement ripe for the picking.
But here’s a fact: EVs make up just 5% of the world’s auto stock. The U.S. government eyes a future where EVs make half of all vehicle sales by 2030. China, the world’s largest EV market, plans major emissions regulations announcements this year. Hence, it’s time to scout the best EV stocks for retirement.
So, EV manufacturers are ramping up production to grab market share. Savvy investors, braving an uncertain economy, have high hopes for the EV industry. As EV adoption climbs, we’ll see more EVs on roads. Some manufacturers will emerge as industry winners. So, let’s delve into the best EV stocks for retirement.
Tesla (TSLA)
At the top of my list of electric vehicle stocks for retirement is Tesla (NASDAQ:TSLA). The company saw a 24% year-over-year rise in the first quarter revenues and hit $23.3 billion. Despite the growing competition across the world, this EV maker is looking for ways to expand its market share and margin.
It had to deal with supply chain issues and also resorted to price cuts recently but these moves have paid off well. The company is now prioritizing sales volumes over profitability and aims to deliver 2 million vehicles in 2023. The total vehicles delivered in the first quarter stood at 422,875. If you are looking for one EV stock to buy and hold on to, it has to be TSLA. The stock is trading at $244 today and is up 136% year to date. The stock has generated over 900% results in the past five years and is steadily moving upwards. It was trading as low as $109 in December and has more than doubled in June.
Elon Musk, Tesla’s CEO, recently visited China and met its political officials. His first visit in three years signals his renewed focus on Tesla and upcoming vehicle models. We anticipate the Cybertruck launch later this year.
Why bet on Tesla? It’s already cracked the success formula and carved a niche in the industry. The company places heavy bets on its success, constantly refining its technology. As one of the world’s most profitable EV makers, it’s primed for steady growth and revenue. So, if you’re hunting for top EV retirement stocks, choose Tesla.
Li Auto (LI)
I am impressed by the way Li Auto (NASDAQ:LI) is paving its way in the highly competitive EV industry. The company is placed in China and has reported strong quarterly numbers and delivery numbers this year. When you compare Li Auto with a leader like Tesla, Li has a lot more space to expand. It has a modest valuation and the company has a longer runway for growth in this decade.
LI stock is trading at $31 today and is up 51% year to date. I think the stock can hit a new 52-week high and have a solid run in the $40s. While several stocks were suffering from supply chain issues and have been moving downward in the past year, Li auto has generated a return of 9% in the year. When looking for EV stocks for wealth building, Li Auto is worth consideration.
With the Chinese EV market expected to grow at 30% CAGR through 2030, Li Auto has immense potential to expand. The company has aggressive expansion plans and aims to add new models this year. It also has a better margin as compared to the other EV makers in the industry. The company reported a revenue of $2.74 billion and a free cash flow of $975.9 million in the first quarter. It has reported profits in the past two quarters which means the management has ensured that the costs remain under control while the production grows.
It delivered 28,277 vehicles in May which was also the third consecutive month where it topped 20,000 EV deliveries. The company has projected deliveries between 76,000 to 80,000 vehicles in the second quarter and it only needs to deliver 23,000 vehicles this month to achieve this goal.
BYD Co. (BYDDF)
The biggest Tesla competitor, BYD Co. (OTCMKTS:BYDDF) has a lot working in its favor. Backed by Warren Buffet, the company recently announced a new brand of EVs consisting of sports cars to off-road vehicles. The brand is known as Fang Cheng Bao and the company plans to launch the first model this year. It has already sold 996,476 cars in the first five months of the year, which is double the number from 2021. BYD stock is one of the top EV stocks for long-term.
The company is not only catering to the Chinese market but has expanded into international markets like Japan, Europe, and Latin America. Besides vehicle production, the company manufactures EV batteries and it is also planning to expand the production of lithium iron phosphate Blade batteries in Zhengzhou. The company is the second-largest EV battery producer in the world. This expansion of its market share was expected but it also throws light on the quality of its products. China will continue to play a big role in the global EV market and BYD is set to gain from the same.
In the first quarter, the company delivered 552,076 new energy vehicles which is a 93% year-over-year growth. It saw over 400% rise in profit from the same quarter the previous year. BYD aims to sell 4 million plug-in EVs in 2023. BYD stock is trading at $32 today and looking at the potential of the company, it looks undervalued to me. It is one of the best EV stocks for retirement.
On the date of publication, Vandita Jadeja 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.
