The earnings season is about to begin and the monthly electric vehicle delivery numbers have already given us an insight into how fast the industry is growing. Whether you believe in the future of EVs or not, they are here to stay and will be on the road across the world. 2022 was a solid year for the industry, it broke all records and EV sales exceeded 10 million. 2023 was a slow start for the industry but the second half could be better. Watch out for some of the best EV stocks to add to your portfolio right now.
With some of the most prominent names reporting solid revenue numbers, there is a lot for investors to look forward to. As EV penetration increases, we will see a rise in production and delivery numbers. By 2030, EVs will represent over 60% of the vehicles sold globally. Investing in EV stocks is a smart way to play the EV game and if you are looking for the best EV stocks to invest in now, consider these three companies.
Li Auto (LI)
One of the best electric vehicle stocks to buy for steady returns, Li Auto (NASDAQ:LI) has reported strong delivery numbers for the past three months and I believe the momentum will continue. The company saw an increase in deliveries by 201% for the second quarter of 2023. It has already surpassed the total deliveries of 2022 in the first six months of this year. It has beaten the quarterly delivery projections and I believe this will lead to a higher revenue and cash flow this quarter. That said, the company is also launching new models and has an aggressive expansion plan to meet its long-term goals.
LI stock is exchanging hands at $34 today and is up 66% year to date. The stock is moving closer to the 52-week high of $40 and still looks undervalued to me. This is one EV maker that has shown resilience even in inflation and performed better than its competitors. The company has strong financials and steady vehicle delivery growth which has led to the stock rally. It delivered 52,584 vehicles in the first quarter and 86,533 vehicles in the second quarter which is nothing short of a feat.
The management had projected deliveries ranging between 76,000 to 80,000 vehicles for the second quarter and it has already surpassed this goal. Li Auto delivered 25,681 vehicles in April 28,277 vehicles in May, and 32,575 vehicles in June. With the launch of multiple new modes, I believe the company will show strong growth. It also has a strong cash flow balance which offers the liquidity to invest in international expansion as well as new product launches. The company could report impressive quarterly results and the stock is a buy before that. LI is a low-risk high-reward EV play right now.
BYD (BYDDF)
BYD Co. (OTCMKTS:BYDDF) is one of the top Tesla (NASDAQ:TSLA) competitors and it has cemented its position in the EV industry. A strong player in China, BYD is also one of the top EV battery makers in the world. The company has a strong appetite for growth and the potential to beat Tesla in the coming years. When it comes to deliveries, BYD has already beaten Tesla with strong numbers. It is one of the most high return EV stocks to consider.
The company is set to launch a new electric SUV which is a direct competitor to Tesla’s Model Y. It will have all the features and a price that is set to rival Tesla. BYD has already received over 20,000 pre-orders for N7 and is about to begin deliveries next week. BYDDF stock is trading at $33 today and is up 30% year to date. The stock looks undervalued to me at the current level and there is a massive upside potential. If the company continues to meet the delivery targets, it will report solid revenue numbers and could crush Tesla in the long term.
BYD is expanding its global presence and has a goal of delivering 4 million vehicles by 2023. It is already growing sales across Europe and has recently launched a new brand that will have SUVs and off-road vehicles. It also launched BYD Dolphin in Australia recently and unveiled five electric vehicles in France. Besides reporting strong delivery numbers, BYD is also set to benefit from the rising adoption of EVs. It is an EV battery manufacturer and a rising demand for EVs means a higher demand for batteries. The company is set to increase the production of lithium-ion phosphate Blade Batteries and has already invested $1.2 million in a plant. BYDDF stock could generate significant returns in the next few years.
General Motors (GM)
There are multiple reasons to like General Motors (NYSE:GM) stock. While its electric vehicle business is not profitable yet, it has the potential to reach double-digit margins in the long term. The automaker enjoys a strong advantage over other players in the industry due to its history and scale. It reported strong sales in the second quarter with a 19% rise in U.S. sales to hit 691,978 vehicles. All of its brands are enjoying solid growth. It also adopted Tesla’s charging network for its cars and this was hailed as a very good move by the industry. The impressive delivery numbers have a positive impact on the company’s top line. GM has a record of beating EPS estimates consistently and I believe it will continue to do so. The company has the experience, cash, and expertise to handle the transition to EVs.
The U.S. EV market is expanding and GM has joined some of the bigger players. EVs have accounted for only 2.8% of the company’s sales in the first six months of the year but it has several EV launches in the second half of the year. While its growth is still in the slow lane, the potential is massive, and getting in on this company right now will increase your chances of enjoying higher returns. GM stock is trading at $39 today and looks highly undervalued to me. It is up 17% year to date and has the potential to hit a new 52-week high very soon. It is one of the top EV stocks to own now.
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.
