Finding the best EV stocks to buy in this market is a real challenge.

This is a high growth potential market as both consumers and governments are favoring EVs over gas-fueled cars. Last quarter alone, more than 300,000 EVs were sold in the U.S., showing the growing increase in demand for environmentally friendly vehicles and boding well for the best EV stocks.

By 2030, we are expected to see over 125 million EVs on the road globally, which is a drastic increase from 26 million last year.

While the competition is fierce in the market, the continuously rising demand for EVs still leaves EVs companies with a high growth potential. Below are some of the seven best EV stocks.

Li Auto Inc (LI)

Li Auto (NASDAQ:LI) is one of the emerging powerhouses in the Chinese electric vehicle market — currently, it specializes in premium quality electric SUVs.

The company has drawn headlines for a stellar year-over-year increase in sales volume of 663.8%, delivering 34,914 vehicles in August 2023. This rapid growth can be attributed to the company’s commendable business model of filling a niche in the EV industry for family-oriented EV cars with extended range capabilities.

While Li Auto’s stock price has dipped moderately since its peak of $46.65 per share, the company’s solid financials make it a relatively safe long-term option for traders.

Li Auto is projected to reach $4.59 billion of sales next financial quarter compared to $4.08 billion in sales this quarter, which is a safe bet considering its track record for beating sales estimates every month in the past fiscal year.

Over the next five years, analysts expect Li Auto’s earnings to increase at a compounded rate of 75%, and this high projected growth is backed by a low debt-to-equity ratio of just 0.03, and a solid cash reserve of $10.2 billion.

The overall electric vehicle industry in China is projected by Bank of America Securities to grow 27% this year, and with Li Auto filling a pivotal need amongst the Chinese consumer base, expect Li Auto to become a cornerstone of many traders’ portfolios in the months to come.

BYD Company (BYDDY)

Chinese company BYD (OTCMKTS:BYDDY) has recently taken the lead over famed EV producer Tesla in global market share, holding over 21%.

This development follows a long price war in the Chinese market with Tesla, with both reporting record-breaking sales for the second fiscal quarter.

BYD holds an edge in the EV industry because of its business model which implements vertical integration.

BYD is the leading producer of lithium ion rechargeable batteries, and has a fully integrated supply chain spanning lithium mines, lithium processing, battery production, and an in-house computer chip unit.

BYD’s stock has been rising steadily since December 2022, supported by strong moving averages and recent breakout patterns.

Its recent move above $33.94, along with solid support at $31.5, reflects a positive market sentiment. The breakout from a pennant pattern indicates potential upward momentum, making it an opportune time for investors to consider entry.

With strong fundamentals and favorable technical indicators, BYD appears promising in the thriving EV market. BYD is by far one of the best EV companies.

XPeng (XPEV)

XPeng (NYSE:XPEV) is a Chinese EV manufacturing company headquartered in Guangzhou with multiple main offices located in major cities overseas.

XPeng announced that the company delivered more than 15,000 Smart EVs last month alone, which was a 12% increase from August and 81% increase year-over-year.

Furthermore, XPeng recently delivered 750 of its vehicles to Israel, which was the largest single batch of exports for the year.

Despite facing regulations abroad, specifically in Europe and the United States, the Chinese EV maker seems adamant on expanding its operations in Israel, and potentially the larger Middle East market.

XPeng’s partnership with local Israeli partner Freesbe highlights the company’s ability to produce customized vehicles that match the preferences of buyers in markets abroad.

It is also important to note that over 60% of all EV sales in Israel were by Chinese manufacturers.

XPeng has been trying to expand beyond its domestic Chinese market, which is evident from its recent shipment to Israel. As the company continues to expand both domestically and internationally, XPeng seems to showcase high growth potential in the EV market.

Rivian Automotive Inc (RIVN)

When Rivian (NASDAQ:RIVN) went public in Q4 of 2021, it recorded one of the highest U.S. IPOs ever, with the company raising almost $12 billion.

However, the company delivered an underwhelming number of its electric trucks or SUVs after going public, and their stock plummeted from IPO at $78 to its current price of about $17.

Despite underperformance in recent years, the forecast for Rivian is quite promising. Rivian expects its production to find stability as it increases the production of its in-house Enduro drive unit and reduce its current reliance on third-party power trains.

This naturally lowers Rivian’s total production costs. Between Q2 of last year to Q2 of this year, the company’s gross margin significantly improved from negative 193% to negative 37%.

While the company has much progress to make in order to break even, its margin will continue to improve as it replaces more of its third-party components to its own productions.

Rivian has been developing its own operating system and chips, which helps the company differentiate itself from its competitors and offers freedom from future supply chain disruptions.

LiveWire Group (LVWR)

LiveWire (NYSE:LVWR) is a division of Harley Davidson that specializes in the production of electric motorcycles.

The company went public just about a year ago, making it the first publicly traded electric motorcycle company in the United States. The current electric motorbikes market stands at $50.3 billion, but according to Statista, this global market could double by 2030.

LiveWire, which competes in the high-performance segment, is currently growing at 27% annually. Besides a growing electric motorcycle market internationally, the company’s gross margin improved from 30.9% to 34.9%. 

In the second quarter of 2023, LiveWire activated a network of 35 retail partners in France, the United Kingdom, Germany, and the Netherlands to expand on the European hybrid market.

One of its most popular models, the LiveWire One, became available in Europe in the second quarter and announced the second edition of its more affordable model, the S2 Del Mar, to attract a wider range of motorcycle riders.

Lucid Group Inc (LCID)

Lucid Group Inc (NASDAQ:LCID) is an American electric vehicle manufacturer that specializes in premium sports automobiles.

Since its launch in 2021, the company has branded itself as “luxury electric cars” to gain a competitive edge in the fierce EV market.

Lucid’s first vehicle, the Lucid Air, has won several awards such as 2023 World Luxury Car at the World Car Awards and the Best Luxury Electric Car in U.S. News & World Report.

Even though these awards do not make Lucid a successful business, it does prove that its vehicles are top-quality products that could compete against well-established EVs like Tesla. 

On top of its proven vehicle quality, Lucid Group’s revenue grew 55% from the second quarter last year to Q2 of 2023, and this number is expected to rise as the company expands its customer base.

The rising number of units delivered to new customers will help Lucid achieve economies of scale, reducing its total costs and improving its margins.

Nio Inc (NIO)

A problem with Nio (NYSE:NIO) has been supply chains. Supply chain issues have plagued Nio, lowering their production and slowing down their growth.

Recently, their supply chains have drastically improved, as they are ramping up production and experiencing few problems with production. A massive bullish factor about Nio is its rapid revenue growth.

In the third quarter, the company is expected to produce around 56,000 vehicle deliveries, which marks a year-over-year increase greater than 75%. Its revenue is also expected to grow, seeing an increase of over 40% year-over-year.

Nio is also bringing about innovation in the EV space, providing a battery-as-a-service subscription. Also, Nio recently developed Nio NT 2.9, a platform with an improved advanced drive assistant system which is attractive to buyers. Although the company is expected to lose a considerable amount of money this year, it has large cash reserves which will be able to cover its losses and facilitate its growth. 

Nio also plans to diversify its business model, using its vast resources to create its own smartphones. Their first phone will be called the Nio phone, and although it’s not expected to perform well in markets like the US, it has significant potential in China, where the company is based. 

On the date of publication, Tomas Levani did not have (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