We’re already into the final quarter of the year and what a year this has been! We embarked on the year with worries about inflation and we’re going into the final quarter with worries about recession. The stock market has seen some of its worst days in the past few months and while we are clinging to hope that it will recover soon, some companies have been standing strong despite the market turmoil. This has led to the rise of EV charging stocks to buy.
This year, the government took several initiatives to transition to electric vehicles and while we do see a growing number of EVs on the road, what lacks is the charging infrastructure. This is one reason consumers aren’t happy with spending money on EVs. Unless the growth of the EV charging network doesn’t match the growth rate of EVs, it will be difficult for the government to achieve its 2030 goals. With that in mind, let’s take a look at the three EV charging stocks that are ready to enter 2024 with a roar.
I am aware that several investors are going to frown at a recommendation to buy ChargePoint (NYSE:CHPT) but hear me out. Now is not the time to write off this company. It has a hardware and subscription-based model which is generating revenue and the company has an edge over several other companies with its global presence.
ChargePoint is one company that is enjoying an early-mover advantage since it already has charging stations across the globe and boasts a strong customer list. The company has seen a rise in subscription revenue which is due to the growing number of charging stations, which can be considered a positive sign for the company’s growth. As the number of charging stations increases, the subscription revenue will also rise. ChargePoint has over 200,000 charging ports and it is steadily growing them.
The company has been reporting losses and it grew to $124 million in the second quarter from $93 million in the first quarter. I think it will still report losses in the next two quarters and then we could see the company turnaround. ChargePoint saw a revenue increase of 39% year over year which hit $150 million and it ended the year with a cash balance of $263.9 million.
For the third quarter, it expects the sales to come between $150 million and $165 million, which could be a 26% rise for the quarter. While Tesla (NASDAQ:TSLA) has opened its charging network for other EV makers, it still only has a presence in the U.S. and this is where ChargePoint gets an edge. CHPT stock has been trading downwards for the past few months and is down 45% year to date. It is trading below $5 today and this is the best opportunity to grab the stock.
If you want to make money from EV charging stocks, invest in BYD (OTCMKTS:BYDDF) The biggest Tesla competitor, it sold more batteries for every vehicle and plug-ins combined than Tesla. It is the second largest battery maker in the world and is leading China’s market. The company has a global presence and has recently expanded to Japan, Australia, and France.
It also shows that BYD Co. will not suffer as much as other EV companies due to the China regulations. The company saw a 75% year-over-year rise in retail sales and hit a milestone of rolling out the 5 millionth NEV. In the first six months of the year, the company saw a 28.6% year-over-year increase in revenue and a 5.3% rise in the gross margin. Stock predictions suggest that 2024 could be a big year for BYD Co.
Having built a strong position in the booming affordable EV industry, it is aiming for a position in the premium EV market. The company aims to offer SUVs, sports cars, and off-road vehicles under its sub-brand. BYD as an EV maker is a highly trusted name in the industry and its increasing market share shows that consumers are happy with the product quality.
The company’s blade lithium ion phosphate battery is known to be highly popular with drivers and also has a higher resistance to overheating. A trusted name in the industry, BYDDF stock is exchanging hands for $30 today and is up 20% year to date. Whether you consider it an EV maker or an EV charging company, BYD Co, is the one to own for long-term gains. I believe BYD is an undervalued stock with massive upside potential. This is one Warren Buffet stock to buy if you want to double your money.
Lithium Americas (LAC)
There are multiple reasons to like Lithium Americas (NYSE:LAC). While the company isn’t a pure-play EV stock, it plays a huge role in EV charging infrastructure and has several catalysts working for it. The company has high-quality lithium assets that could unlock significant value in the coming years.
One of its biggest assets, the Thacker Pass project has a post-tax valuation of $5.7 billion and it is expected to commence in 2026. The company recently discovered the world’s largest deposit of lithium on the border of Oregon and Nevada. Lithium Americas estimates that it could contain 20 to 40 million tons of lithium and if it gets access to this hot commodity, it could be one of the biggest players in the industry. It is one of the hot EV charging stocks to own.
The company is in talks with the U.S. Department of Energy to secure over $1 billion loan for its Nevada project. If approved, this could be a record loan and will give Lithium Americas access to funds for the mine.
Trading at $17 today, the stock is down 20% in the past six months. Smart investors know this is an opportunity to buy. While you might not get to see an upside anytime soon, this is one stock that is worth holding for the years to come. Once the Thacker Pass starts cash flow generation, Lithium Americas will be at the top and this is when you will be able to take home significant gains.
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.