SPECIAL REPORT The Top 7 Stocks for 2024

The 3 Most Undervalued EV Stocks to Buy Now: August 2023 

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  • Before the EV industry charges ahead in full throttle, load up on these three undervalued EV stocks.
  • Nio (NIO): Chinese EV maker Nio has bounced back with impressive delivery numbers in July.
  • Li Auto (LI): Li has a solid demand for its cars and impressive financials that can please any investor.
  • Byd Co. (BYDDF): Byd Co. is growing at a rapid rate and could become a leader in the EV industry over the next few years.
Best EV stocks - The 3 Most Undervalued EV Stocks to Buy Now: August 2023 

Source: Ilija Erceg / Shutterstock

The only way to beat the rise in oil prices this year is by switching to an electric vehicle (EV). The switch wouldn’t be cheap, but it can save you thousands in expenses over the years. Governments across the world are making every effort for the electrification of the automobile industry. You will come across different incentives that push the adoption of EVs and make the transition as quick as possible. Whether you are ready to switch to an EV or not, the industry is still in an early stage, and that means investors have a solid chance of making the most of the upside in electric vehicle stocks.

Electric vehicle companies are taking big strides toward increasing deliveries, and the recent numbers have left investors impressed. Now is the right time to make the move and add the best EV stocks to your portfolio.

Best EV Stocks: Nio (NIO)

NIO logo on the smartphone screen and the chart of stock market at the blurred background.
Source: JOCA_PH / Shutterstock.com

Nio (NYSE:NIO) struggled a lot due to supply chain issues in China, and the company saw production snags and delivery delays, which led to a drop in investor confidence. NIO stock has dropped to $12.90 today, down 39% over the past year. However, there is a recent positive upside to the stock. It has increased by 23% in the past six months and has almost made up for the losses. There are several reasons to buy this as one of the top electric car stocks now.

The company has recently completed the construction of its production facility in Hefei, which can manufacture over 1 million EVs annually. Its recent delivery numbers are also encouraging. The company announced deliveries of a record number of EVs in July, which is the first time it has delivered over 20,000 vehicles. July deliveries saw an increase of over 103% year over year.

Additionally, Nio offers battery-as-a-service with a battery exchange service and allows users to buy EVs without having to pay for batteries. That gives it an edge over the other EV makers. It also offers faster charging as compared to others. While Nio is still reporting losses, the company has the potential to report profits in the coming years. It also has a presence across Europe, and if not for the supply chain issues in 2022, Nio would have already expanded to other countries. The production has started to grow in the past few months, but there is a long road ahead. Its second-quarter results will be interesting and will pave the path ahead. Holding NIO stock at the current level could give a strong chance to make the most of the upside in the coming months.

Li Auto (LI)

Li Auto electric car in store. Li Auto Also known as Li Xiang, is a Chinese electric vehicle (EV) company
Source: Robert Way / Shutterstock.com

I have been following Li Auto (NASDAQ:LI) for a while, and I think it is one of the top EV stocks to buy now. The company reported stellar results and crushed earnings forecasts. It also gave better-than-expected guidance. It earned $0.38 per share and reported sales of over $3.95 billion. The revenue was 228% higher than the same quarter the previous year, and I believe it has the potential to keep moving forward in the coming quarters.

LI stock was performing well even when the market was in turmoil. The stock is trading at $40 today and is up 92% year-to-date. There is a lot to look forward to with Li Auto. It managed to triple car deliveries in its second quarter compared to the same period the previous year. The company intends to triple its lineup by 2025, which means it has plans to increase vehicle manufacturing and deliveries in the coming months.

Li Auto aims to achieve the milestone of 40,000 monthly deliveries by the end of this year, and the way it is moving forward, I believe it can certainly do so. The company has seen high demand for its vehicles, and its L7 has steadily topped the country’s SUV monthly sales chart. Besides reporting strong revenue and delivery numbers, the company also had a solid improvement in free cash flow. It has reported a free cash flow of $975 million, over a 100% increase from the free cash flow in the final quarter of 2022.

Li Auto is in a good place right now and is firing on all cylinders. With strong financial results and impressive delivery numbers, Li has a strong quarter ahead. Considering its potential, the stock looks undervalued to me and is a solid addition to your portfolio.

Best EV Stocks: BYD (BYDDF)

A close-up view of the power supply plugged into a vehicle from BYD Company (BYDDY).
Source: J. Lekavicius / Shutterstock.com

A well-known Tesla (NASDAQ:TSLA) competitor, BYD (OTCMKTS:BYDDF), could become a winner in the EV race. Warren Buffet’s favorite EV maker, BYD has a strong market share and reported better deliveries than Tesla. It delivered over 700,000 new energy vehicles in Q2, including hybrids. The company has new plants scheduled to start production in China, and a new factory should be ready in Thailand by 2024.

Besides holding a strong market in China, it is also expanding across Europe. It recently launched the BYD Dolphin in Australia and introduced five new cars in France. The company reportedly sold over 4 million NEVs as of June. Additionally, BYD is the second-largest EV battery supplier globally and has solid financials. It posted a net profit of $600 million and an 80% rise in sales. It is steadily marching ahead and could overtake Tesla in the future. I think it is one of the most undervalued EV stocks.

The company’s batteries are high in demand and are known for durability and high performance. BYDDF is changing hands at $32 today, down 8% in the past month. This is your chance to load up on the stock before it soars. Considering its deliveries and financials, I expect the stock to double in the coming months.

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.


Article printed from InvestorPlace Media, https://investorplace.com/2023/08/the-3-most-undervalued-ev-stocks-to-buy-now-august-2023/.

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