As the electric vehicle (EV) market booms, savvy investors pin out the next big players in the industry. The article explores three breakout EV stocks with the potential to soar.
Read more to uncover how these three EV stocks are poised to surge by a remarkable 300%, steering the course of the EV revolution.
Li Auto (LI)
Li Auto’s (NASDAQ:LI) focus on tech innovation can be observed in advancements in autonomous driving technology. The progressive development of City NOA (Navigate on Autopilot) on the AD Max platform signifies the company’s focus on staying at the edge of smart driving capabilities. Also, the smooth progression of City NOA on the AD Max platform is a strategic move to capitalize on the demand for the autonomous driving experience.
Li Auto releasing AD Max 3.0 with full scenario NOA functionality is a significant step toward achieving higher levels of autonomy in its vehicles. This release positions the company as a market-proven first-year player in the autonomous driving market by the first half of 2024. The company’s lead in achieving this milestone represents a continuous improvement in autonomous driving capabilities.
Furthermore, the integration of AD Pro 3.0 is expected to be released in the H1 2024. This expands Li Auto’s autonomous driving portfolio. Incorporating AD Max’s algorithmic capabilities into AD Pro boosts users’ overall autonomous driving experience. This strategic approach of deploying advanced autonomous driving features across multiple vehicle lines and scenarios may keep Li Auto competitive in the EV space.
Finally, regarding investment, Li Auto focuses on increasing the research team for autonomous driving. A boost from around 900 people to about 2,000 by the end of 2024 reflects its investment in the tech forefront. In this context, the company’s topline for Q3 2023 reached an impressive RMB 34.68 billion, representing a solid year-over-year increase of 271.2%. Therefore, this performance results from the synergy between Li Auto’s robust delivery growth and effective product development strategies.
Albemarle (ALB)
Several factors contribute to Albemarle’s (NYSE:ALB) impressive topline growth. Firstly, the company’s focus on energy storage volumes is vital. Expanding mining and conversion assets has resulted in higher energy storage volumes. It is a core driver behind the 10% increase in net sales during Q3 2023. This strategic focus aligns with the increasing demand for energy storage solutions, particularly in the growing EV market.
Albemarle expanding mining and conversion assets highlights the company’s focus on meeting the rising demand for lithium, a critical component in EVs and energy storage systems batteries. As the adoption of EVs continues to rise, Albemarle’s focus on energy storage positions the company as a vital supplier in the market.
Furthermore, the edgy 55% growth in net sales for Q1 to Q3 2024 suggests the company’s adaptability against the softer lithium market pricing. Also, Albemarle’s focus on strategic investments can be observed in its 2023 outlook. Despite the challenges posed by softer lithium market pricing, the company is still optimistic about its long-term growth. For 2023, the company is projecting a net sales increase between 30% and 35% year-over-year. Hence, this reflects Albemarle’s solidity in its strategic direction.
There is also a vital development in the form of a $90 million grant from the U.S. Department of Defense. This grant supports expanding domestic mining and lithium production for the nation’s battery supply chain. The grant’s allocation to purchase a mining equipment fleet for the Kings Mountain restart indicates Albemarle’s strategic alignment with national priorities. Thus, the grant recognizes Albemarle’s role in supporting EV supply chains.
Aptiv (APTV)
Aptiv’s (NYSE:APTV) strategic positioning to edge out from the transition to a software-defined future in various industries suggests solid value growth. Focusing on telecom, aerospace and defense and industrial markets demonstrates the company’s lead towards diversification beyond traditional automotive applications.
The acceleration in telecom, aerospace, defense and industrial markets offers significant capitalization opportunities for Aptiv. Also, this diversification helps mitigate risks associated with the cyclical nature of the automotive (including EV) industry.
Fundamentally, Aptiv’s reach is vital for its diversification strategy. Operating in different regions breeds the company’s capabilities to tap into diverse markets. Also, it supports the adaptation to regional trends and capitalizes on emerging demand. For instance, there is a record $12 billion (Q4 2023) in bookings for the Advanced Safety and User Experience segment. This suggests the increasing demand for safety technologies and enhanced vehicle user experiences.
Moreover, there is an 11% annual topline growth in Active Safety despite challenges like the United Auto Workers strike, demonstrating the robustness of Aptiv’s solutions in the safety tech domain. As EVs become more sophisticated and software-defined, this growth makes Aptiv the leader of active safety solutions.
Finally, there is a segment-adjusted operating income of $141 million (Q4 2023), with an 83% increase over Q4 2022. This suggests the commercial success and operational efficiency of the Advanced Safety and User Experience segment. As a result, the significant margin expansion of 4.4% to 10.4% indicates revenue growth with improved profitability and related value potential.
On the date of publication, Yiannis Zourmpanos 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.
