International Energy Agency data indicates that more than 10 million electric vehicles were sold globally in 2022. It’s expected that EVs sold will increase by 35% this year to 14 million. The growth trend seems promising and that’s one reason to consider exposure to some of the top EV stocks.

Another reason to be bullish is the fact that this is just the beginning of the growth story. A Goldman Sachs estimate indicates that half of new cars sold globally will be EVs in 2035. Further, global EV sales will accelerate to 73 million by 2040.

Given these estimates, there is a big potential for growth. The growth story will encapsulate car makers, EV charging infrastructure companies, EV battery companies, and producers of metals. This column will discuss seven of the top EV stocks that are positioned to benefit from sustained positive industry tailwinds. Let’s discuss the reasons to be bullish on these top EV stocks.

Tesla (TSLA)

Tesla (NASDAQ:TSLA) surged by 144% year-to-date. Without a doubt, it’s among the top EV stocks to buy on corrections. A 10% downside from current levels would be an attractive entry point.

From a fundamental perspective, Tesla reported cash and equivalents of $23 billion as of Q2 2023. Further, the company generated an operating cash flow of $5.6 billion for the first half of the year. This is important to mention as Tesla has an ambitious target of producing 20 million cars annually by 2030. The company’s financial flexibility is robust to invest in multiple factories.

I also like the fact that Tesla has an attractive product lineup. This includes the Cybertruck, Roadster, and Tesla Semi. The company’s delivery growth is likely to remain healthy. It’s also being speculated that the revenue potential from Tesla’s supercharger network can be in excess of $100 billion. The growth story therefore looks attractive and TSLA stock is poised to remain in an uptrend.

Li Auto (LI)

Li Auto (NASDAQ:LI) has already seen a strong rally year-to-date. The upside from oversold levels has been backed by strong business developments. I believe that LI stock is worth accumulating on corrections with an investment horizon of five years.

For Q2 2023, Li reported delivery growth of 201.6% on a year-on-year basis to 86,533. Robust growth has been backed by aggressive expansion in the retail network coupled with the launch of multiple new models. It’s worth noting that Li Auto will unveil the super flagship 5C BEV model, Li MEGA, in Q4 2023. I believe that delivery growth will remain stellar in 2024 and beyond.

Another reason to like LI stock is healthy margins. For Q1 2023, the company reported a vehicle margin of 19.8% and a free cash flow of $975.9 million. With operating leverage, FCF is likely to accelerate and the company’s financial flexibility will remain high for investment in innovation.

ChargePoint Holdings (CHPT)

Electric vehicle charging infrastructure stocks have been depressed and ChargePoint Holdings (NYSE:CHPT) is no exception. However, I believe that the worst of the correction for CHPT stock is over. A breakout rally is likely after some consolidation.

From a business perspective, there are several positives to note. For Q1 2024, the company reported 59% year-on-year revenue growth to $130 million. It’s important to note that subscription revenue increased to $26.4 million. As the number of charging ports installed increases, recurring revenue will swell. This will boost the company’s EBITDA margin. ChargePoint reported a gross margin expansion of 800 basis points in Q1 2023 on a year-on-year basis.

It’s also worth noting that ChargePoint has a strong presence in North America. Additionally, the company is already present in 16 countries in Europe. With a wide addressable market, the company’s revenue growth is likely to remain robust in the coming years.

Albemarle (ALB)

Albemarle (NYSE:ALB) stock has been trending lower in the last few months. The reason is a correction in lithium price. However, through the decade and beyond, the lithium supply gap is likely to worsen. There is little doubt on the point that lithium will trend higher on the back of strong demand from the EV battery segment.

It’s therefore a good time to accumulate Albemarle, which currently trades at a forward price-earnings ratio of 9. I would not be surprised if the stock doubles in the next 24 months. In terms of company-specific growth, Albemarle expects lithium sales volume to increase at a CAGR of 20% to 30% through 2027. This will translate into revenue and cash flow upside. Potentially higher realized prices will accelerate free cash flows. I, therefore, believe that ALB stock is among the best dividend growth stocks to consider at current valuations.

Polestar Automotive (PSNY)

Polestar Automotive (NASDAQ:PSNY) stock had touched lows of $3.10 in March. The stock is higher by almost 40% at current levels of $4.33. I believe that the uptrend is likely to sustain with several positives on the horizon.

Earlier this year, the company revised its delivery guidance on the downside. This factor is discounted in the stock and the company is on track to achieve the revised guidance of 60,000 to 70,000 deliveries. I believe that delivery growth is likely to accelerate meaningfully next year and in 2025.

The reason is the commercial launch of Polestar 3 and Polestar 4 in Q1 2023. If macroeconomic conditions are favorable, delivery growth will be robust. Further, another model is due for launch in 2026. It’s also worth noting that the company has intensified cost-cutting measures. EBITDA level losses are likely to narrow. Operating leverage will further contribute to an improvement in EBITDA margin.

Panasonic Holdings (PCRFY)

Among EV battery companies, Panasonic Holdings (OTCMKTS:PCRFY) looks attractive. Even after a rally of 47% for the year, PCRFY stock trades at a forward price-earnings ratio of 11.2. Further, the stock offers a dividend yield of 1.73%. I expect multi-bagger returns over the next five to seven years.

A big reason to like Panasonic is the company’s aggressive growth plans. Once the Kansas battery plant is operational, the company expects annual capacity to increase to 80 GWh. However, Panasonic is targeting an EV battery capacity of 200 GWh by 2031.

To accomplish this, Panasonic needs to construct four more factories. The plans provide clear revenue and earnings growth visibility. Panasonic has been an innovator and that’s another reason to like the stock. The company is targeting a 20% increase in battery density by 2030. This will make EV batteries smaller and lighter.

Solid Power (SLDP)

Solid Power (NASDAQ:SLDP) is another EV battery stock that’s worth holding. The company is still at an early stage and multibagger returns are likely. SLDP stock has remained in a downtrend in the last few quarters. I see current levels as attractive for fresh exposure.

As an overview, Solid Power is working towards the commercialization of solid-state batteries. It’s unlikely that the product will be on the market before 2026. However, I expect SLDP stock to trend higher if the research and development progress is encouraging.

It’s worth noting that the company will be delivering EV cells to automotive partners for validation testing in 2023. This is an impending catalyst for stock upside. In Dec., the company agreed to license its technology to BMW (OTCMKTS:BMWYY). This will help in parallel research and development activity. With a healthy cash buffer, Solid Power is fully financed for the next 12 to 18 months.

On the date of publication, Faisal Humayun 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.