Investing in the electric vehicle (EV) sector is not for the weak, and comes with a lot of risk and turbulence. Therefore, finding the best EV stocks to buy and hold is crucial to avoid losing your money.
The year of 2024 has not been so hot, as the global economy navigates increasing inflationary pressures. Additionally, demand for EVs has softened significantly and many of the biggest players have lowered their prices to drive sales growth. This cyclical headwind is worrisome for traders but could provide a great opportunity for long-term investors who are not in denial of the energy transition. While numerous EV stocks are available, not all are created equal. By focusing on the companies with strong fundamentals, investors can capitalize on the accelerating transition to electric mobility.
Now, here are the top three no-brainer EV stocks to buy and hold for significant returns as the market expands globally.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) has undeniably revolutionized the automotive industry, spearheading the transition towards sustainable transportation. Despite its forecast lower deliveries and vehicle gross margins in 2024, it remains a top contender among EV stocks to buy and hold over the next decade.
Tesla’s relentless innovation, robust infrastructure, and expanding product portfolio solidify its dominance in the market. Their Gigafactories, strategically located in the United States, Asia, and Europe, are crucial to meeting the global demand for EVs. These massive production facilities have allowed Tesla to reach economies of scale. This has in turn helped reduce costs, making EVs more affordable for consumers. Moreover, they also operate the largest EV supercharger network in the world, providing a unique competitive advantage. Investors are also bullish on their full-self driving (FSD) capabilities, as well as the prospects of a robotaxi network driven by their highly coveted data. As macroeconomic conditions improve through mid-decade, Tesla is well positioned to pick up where it left off.
ON Semiconductor (ON)
ON Semiconductor (NASDAQ:ON) is not an electric vehicle company but quietly plays an important role in the EV ecosystem. As a leading supplier of power and sensing solutions, their technology is integral to the efficient operation and safety of EVs.
ON Semiconductor’s diverse product portfolio extends beyond EVs, encompassing various industries like industrial automation, healthcare, and aerospace. However, their expertise in silicon carbide (SiC) technology is crucial for enhancing the efficiency of EV powertrains. Their SiC modules include battery management chips, SiC MOSFETs, gate drivers and sense amplifiers. This technology helps power the industry forward and broadly appeals to the renewable energy market.
The company has remained extremely resilient in the last 12 to 18 months, as management navigates a tougher macroeconomic environment. However, it continues to make strategic investments to increase its manufacturing capacity to produce up to 1 million SiC wafers per year at its SiC production facility. With a price-to-earnings (P/E) ratio of just 15, ON stock will rocket higher once inflation and interest rates become more favorable.
Ferrari (RACE)
Ferrari (NYSE:RACE), renowned for its iconic sports cars, is not typically associated with EVs. However, the company is making strides in electrifying its fleet, recognizing the inevitable shift towards sustainable mobility.
While Ferrari’s foray into EVs is still in its infancy stages, the company’s strong brand recognition and loyal customer base make it a compelling long-term investment. Its first fully electric vehicle is planned to hit the market in mid-2025. This will undoubtedly redefine the performance of the luxury EV segment, an area that has had an extremely difficult time capturing its audience. The company’s expertise in engineering, design and craftsmanship, will translate to a unique and desirable electric offering. In the 2023 fiscal year, the company saw record revenue, earnings and FCF. Management remains confident in building on the momentum, forecasting strong double-digit growth through 2026. This makes RACE stock one of the best EV stocks to buy and hold to outperform the market through 2030.
On the date of publication, Terel Miles 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.
