Despite the macroeconomic situations, the rising inflation, and concerns around a looming recession, the Electric Vehicle industry has shown resilience and steadily grown. However, there is a long way to go for the industry and this means that EV companies are set to benefit from this transition to electric. The EV market is currently at $500 billion and is expected to grow to $906.70 billion by the end of 2028. With support from the government and the penetration of EVs globally, it can achieve a CAGR of 10.07% by 2028 and this will give a boost to top EV stocks to buy.
No matter who wins the EV race, if you are investing in EV stocks, it has to be one of these three names. These are strong players in the industry and have already built a name for themselves. The companies are stable, steady, and have an impressive balance sheet. With the transition to EVs, there is a solid chance for these three stocks to soar higher in the coming months. Here are the top EV stocks to buy.
Tesla (TSLA)
Having just announced the second quarter results, Tesla (NASDAQ:TSLA) has been in the news for several reasons. The company managed to beat estimates on earnings and revenue but the shares dropped. Its revenue climbed 47% year over year and hit $24.9 billion while the EPS hit $0.91. This growth was driven by the strong quarterly delivery numbers which lead to a 46% rise in the automotive revenue. But the market wasn’t happy with the operating margin and the recent price cuts which have weighed on the company’s ability to generate profits. But this could be an immediate and temporary reaction to the results and you shouldn’t write off Tesla stock. It is the single best EV stock to own.
TSLA stock is trading at $260 right now and is up 80% in the past six months. The stock is up 140% year to date and several catalysts will keep the stock moving. Tesla’s Cybertruck production is on track and it recently produced the first truck. The company will be investing more than $1 billion to build Dojo’s capabilities. The development of the Dojo supercomputer system will help the company inch closer to achieving higher efficiency in its autonomous driving capabilities. This makes it one of those top EV stocks to buy.
If we focus on the delivery numbers, the second quarter deliveries reached a new record with 466,140 cars. One reason to bet on this stock is the fact that it is so much more than just an automaker. It is a leader in the industry and has a strong market. Tesla is planning to enter India this year and its ride-hailing taxi, the Robotaxi could transform the future of ride-sharing services. While it won’t be on the roads anytime soon, the future of Tesla looks bright and it is worth an addition to your portfolio.
BYD Co. (BYDDF)
A Chinese company and the biggest competitor of Tesla, BYD Co. (OTCMKTS:BYDDF) has been reporting strong numbers and solid deliveries in the last few quarters. The company makes EVs and batteries which give it a strong hold in the industry. It is one of the largest EV makers and the second-largest EV battery maker. The company has maintained a strong market position despite the rising competition and has impressive financials.
While the risks associated with a Chinese company remain, BYD does not restrict itself to the country and has a global presence. It recently launched BYD Dolphin in Australia and entered France. BYD has managed to increase its revenue by 96% in 2022 and its net income surged to $2.4 billion. It reported a whopping 411% rise in the first quarter profits and hit $600 million while the sales increased by 80%.
BYDDF stock is exchanging hands at $33 and has gained 32% year to date. It has seen a dip in the past week after India rejected its proposal to build a four-wheeler facility in the country. However, the company enjoys a positive outlook, and with the increase in the adoption of EVs, the demand for EV batteries will also see a rise and this will help the stock move upwards.
BYD has recently released a new SUV, N7 that will directly compete with Tesla’s Model Y and it has already received more than 20,000 pre-orders for the same. This shows the strong consumer confidence towards the brand and it is proof that consumers are ready to wait for BYD cars. BYD Co. has strong growth potential and could be a leader in the coming years. BYD stock looks aptly valued to me and is a buy at the current level.
Li Auto (LI)
A high-potential EV stock, Li Auto (NASDAQ:LI) deserves a place in the best EV stocks with Tesla and BYD Company. It reported a solid 86,533 deliveries in the second quarter, up from 52,534 deliveries in the first quarter, and has managed to meet its second-quarter delivery projections. It will reflect on the top and bottom lines when the company announces results. LI stock is trading at $36 today and has gained 76% year to date. If you had purchased the stock during its IPO, you could be sitting on massive gains today. The stock is very close to its 52-week high of $38 but there are chances of it moving upwards once it announces results.
It has thrived despite the market rout and the lockdowns in China. In the first quarter, the company went from a loss to profitability and reported a revenue of $2.74 billion, a 96% rise from the same period the prior year. Just like BYD, the company is well-placed in China and is a market leader there. To keep up with the rising EV demands, it also plans to triple its lineup by 2025. It has a solid runway for growth and it is one of the top EV stocks to buy.
The stock will move higher once it reports the quarterly results and we will see solid long-term gains. Li Auto is doing much better than its competitors in the industry and as the demand and adoption of EVs continue to grow, it will see even better delivery numbers and report stronger revenue. If the company manages to increase the export numbers, it could be leading the EV race.
