The electric vehicle (EV) market is likely headed toward a slump in 2024. Tesla (NASDAQ:TSLA) CEO Elon Musk has warned the EV maker could experience slower growth in 2024. Interest rates remain elevated, and the Federal Reserve does not want to be hasty about cutting them either. Moreover, despite the economy performing better than many had predicted, consumer sentiment remains below where it was before the pandemic.
Despite this, there are good reasons to be investing in reasonably valued EV stocks. These companies are not only trading at relatively cheap multiples, but their value proposition remains intact as secular trends continue to push consumers to electric vehicles.
Without further ado, here are three EV stocks that could make your February unforgettable.
NXP Semiconductors (NXPI)
NXP Semiconductors (NASDAQ:NXPI) is a Netherlands-based semiconductor behemoth that specializes in designing wireless connectivity devices and a number of silicon-based controllers for various applications. One of these applications happens to be for electrification. In particular, NXP has developed an EV traction inverter that is responsible for converting DC power from the battery to AC power to drive the traction motor.
EV charging station manufacturers typically design them with at least one smart controller board and one power socket board. NXP’s solutions provide the power measurement, device management and data security measures necessary for these devices to work efficiently.
The company is currently trading at only 16.9x forward earnings despite playing in burgeoning spaces, including EVs and internet-of-things.
Autoliv (ALV)
Automotives have become increasingly technologically sophisticated over the past couple of decades. More technology requires better safety measures, and that’s where our next entry comes in. Autoliv (NYSE:ALV) develops and manufactures passive safety systems for automobiles in Europe, the United States, and many parts of Asia. The company has been around since the late 1950s and has been integral to the evolution of car safety systems. Autoliv is now the largest supplier of airbags and seatbelts.
With the rise of EVs, Autoliv has a lot of opportunities ahead of it. The company’s Q4 earnings report saw the company’s profit margins increase as the availability of semiconductors increased. Autoliv has also announced a new partnership with Chinese EV maker Nio (NYSE:NIO), which will include the development of new safety technologies.
The automotive safety stock is trading at only 11.3x forward earnings, which makes it a great bargain in this market.
BYD (BYDDY)
BYD‘s (OTCMKTS:BYDDY) growth in both China and abroad appears unmatched at this point in time. Last year, BYD became the world’s top EV maker in 2023, trouncing its American rival Tesla in terms of electric vehicle sales. In Q4 2023, BYD sold 526,409 electric vehicles, while Tesla sold 484,507.
BYD has also maintained a pretty diversified business, not only manufacturing EVs but also supplying the batteries that power them. The automaker became a key player in the battery market, ousting LG Energy Solutions as the world’s number two EV battery supplier.
The Chinese EV giant’s growth cycle hasn’t peaked yet. BYD has made a new partnership with Qatar-based dealership Mannai to begin introducing BYD’s electric vehicles into the market. The company is also fleshing out partnerships to increase brand awareness in Europe.
BYD, which is now larger than Tesla in terms of EV sales, only trades at 14.1x forward earnings, which could present a great opportunity for interested investors.
On the date of publication, Tyrik Torres 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 Publishing Guidelines.
