One of the only ways to beat rising oil prices is to switch to an electric vehicle. While they don’t come cheap, they do benefit your pocket and the world in the long term.
In order to achieve the climate change goals, worldwide governments are incentivizing EV makers and trying to achieve a target by 2030. However, only a small percentage of EVs are currently on the road. As countries gear up for EV manufacturing, several EV companies are set to benefit from the transition.
A smart investor should know when to leap into investing in EV stocks. If you’re ready to pump up your portfolio, let’s delve into three overlooked EV stocks.
ChargePoint (CHPT)
ChargePoint (NYSE:CHPT) is rapidly expanding its network of charging stations, proof that the company will remain a strong industry player. With no problems in the top line, it reported a revenue of $150.5 million for Q2 and achieved a 39% year-over-year (YOY) growth.
Investors should consider the subscription revenue growth. ChargePoint earns revenue through the sales of charging systems to customers and through subscriptions to the software and services. As long as those grow, the company will report strong numbers. So, more charging stations means increased subscription revenue.
CHPT has an edge over Tesla’s (NASDAQ:TSLA) since the latter’s charging stations are U.S.-limited while the former is expanding internationally. With over 200,000 charging ports, it’s rapidly growing. The stock at $5.18 appears highly undervalued, and it’s down 43% year to date (YTD).
True, CHPT’s losses have grown and hit a hefty $124 million. This is primarily due to a one-time charge and could be temporary. It expects sales of $150 million to $165 million in the coming quarter. TD Cowen analyst expects a 95% upside for the stock from its current level.
Nio (NIO)
Nio (NYSE:NIO) stands poised to increase sales with a double-shift manufacturing production plan. Total vehicle deliveries in July came in at 20,462 with over 10,000 being its ES6 SUVs. August deliveries boasted 19,329 vehicles.
Also, its Battery as a Service (BaaS) is one of the most interesting aspects that sets the company apart from other EV makers. It aims for continued growth of its charging stations in the coming years.
Further, the company has entered the smartphone market, expecting about half of its users to buy the phone, which allows seamless connectivity between the device and the vehicle.
The EV maker aims to launch a 2025 mass-market brand, potentially increasing the market share. NIO caters to a niche segment with high-priced SUVs that compete with top luxury brands. Nio stock is down 8% YTD, trading at $8.82 currently.
However, this is one overlooked EV stock to buy while it sits at a discount.
BYD Co. (BYDDF)
Tesla’s competitor and Warren Buffet’s favorite EV company, BYD Co. (OTCMKTS:BYDDF) is one of the most overlooked EV stocks.
The company saw a massive 204% profit rise as the second-largest battery maker in the world. By July this year, BYDDF was the biggest-selling brand in China’s market with a 75% YOY rise in sales.
BYD Co. has recently rolled out the 5 millionth NEV making it the first automaker to hit this number. The numbers show it’s not only growing the production but also its cars are in heavy demand.
The company that’s expanded to Australia and France is working to grow its vehicle offerings. To increase production, it’s invested in a new Thailand factory, with production set to start in 2024. Also, it recently launched its second model for the Japanese market.
Considering the BYD’s potential and an estimated rise in EV demand, the company stands to benefit significantly from the global EV market. Trading at $31 today, the stock is up 22% YTD and moving closer to its 52-week high of $36.
When it comes to global dominance, BYD Co. is just getting started.
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.
