EV demand in the U.S. is being weighed down by high interest rates and consumers’ increased preference for hybrid vehicles. Still, the number of EV sales continues to climb year-over-year and, according to Barron’s, EVs’ share of the overall U.S. auto market even increased slightly in Q1 to 7%. Moreover, the recent increases in oil prices, along with the U.S. Federal Reserve’s upcoming rate cuts, should cause the demand for EVs to increase going forward. So for the U.S. EV market, it’s very much a case of down but not out. Making now a great time to find stocks to buy amid the EV demand slump.
Further, the situation appears to be much better in China, as the China Passenger Car Association recently predicted that the combined sales of EVs and plug-in hybrids in March soared 33% year-over-year. For investors who want to exploit the continued growth of EV sales, here are three stocks to buy amid the EV demand slump.
Rivian (RIVN)
U.S. EV startup Rivian (NASDAQ:RIVN) is partnering with one of the leading players in the commercial vehicle space. Specifically, Rivian’s chassis and batteries are being used by a huge commercial vehicle producer and marketer, JB Poindexter & Co, to develop a new electric delivery van. The EV is slated to be sold to Canada’s postal delivery system which will use the vehicle deliver mail.
JB Poindexter has long-standing relationships with both Fedex (NYSE:FDX) and UPS (NYSE:UPS). This means Rivian’s collaboration with JB Poindexter could very well lead to needle-moving revenue from one or both of the huge package-delivery firms. And there’s an excellent chance that JB Poindexter will sell the new electric delivery van to multiple other government-owned delivery firms, further boosting Rivian’s top and bottom lines.
EVgo (EVGO)
Despite the sharp deceleration in the growth of EV sales in the U.S., some automakers are actually growing quite rapidly. That bodes very well for EVgo (NASDAQ:EVGO), one of the leading providers of public EV chargers in America.
Last quarter, for example, Hyundai’s U.S. EV sales soared nearly 130% versus the same period a year earlier to 5,345. Meanwhile, Ford’s (NYSE:F) U.S. EV sales jumped 86% year-over-year to slightly over 20,000. And BMW (OTCMKTS:BMWYY) provided U.S. customers with over 10,700 EVs last quarter, representing a very strong YOY increase of 63%.
The fact that some EV brands are growing rapidly bodes well for the entire EV market, since the owners of those brands will likely radically increase production and sales of those automobiles going forward. And, of course, more EVs on the roads will translate to increased demand for EVgo’s chargers over the longer term.
Xpeng (XPEV)
Chinese EV maker Xpeng (NASDAQ:XPEV) is successfully exploiting the relatively strong Chinese EV sector. Its deliveries climbed 20% last quarter versus the same period a year earlier to over 21,800.
The firm has a very impressive Advanced Driver Assistance (ADA) system. Encouragingly, it recently reported that the the monthly active user penetration rate of its ADA system had risen to 82% in urban driving scenarios. The fact that XPEV’s customers are frequently using its ADA indicates that the system is quite useful and user friendly.
What’s more, I believe that the automaker’s collaboration with Volkswagen (OTCMKTS:VLKAF) will boost Xpeng’s credibility and sales in both Europe and China. Mainly due to Volkswagen’s strong brand name in both regions. The firms are slated to jointly launch two new EVs in 2026.
On the date of publication, Larry Ramer held long positions in RIVN, EVGO, and XPEV. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
