The EV industry has seen slowed growth in the recent past as the rise in inflation, financial costs and increased consumer skepticism reduce demand and slow down sales growth. Many new industry entrants have also faced insurmountable challenges, with excessive cost overruns, failure to meet targets, and stiff competition making it difficult to break even.
Even with these challenges, the EV industry continues to grow, with data indicating that EV sales in the US increased by 47%. A report by the International Energy Agency also indicates that since 2019, EV stocks have consistently outperformed general stock markets, including traditional car makers.
With this industry growth, there are a few undiscovered EV stocks that, while currently undervalued by Wall Street, have promised to deliver value in the future. Now let’s take the journey through the treasure hunt to discover these EV stocks Wall Street hasn’t discovered yet.
The Lion Electric Co (LEV)
The Lion Electric Co (NYSE:LEV) is a Canadian-based EV manufacturer focusing on commercial vehicles. It’s currently the biggest commercial EV manufacturer, taking a lead in a market where many EV manufacturers are still wary to enter. The company produces electric public transport buses, yellow school buses, garbage trucks, bucket trucks, and semi-trucks.
Lion Electric Company has had rough times in recent years, losing over $56.5 million in Q4 2023 and $103.8 million overall due to heavy losses that outweighed the revenue stream. The company responded swiftly by restructuring its value chain, laying off over 150 employees towards the end of 2023, and recently announcing the intention to lay off 120 more staff.
However, for industry hawk eyes, it is just a matter of time before Lion roars back, with all factors aligned to ramp up production and meet the delivery targets by the end of 2025. The company has seen a steady increase in vehicle production from 519 in 2022 to 852 in 2023. However, the recent $38 million deal to supply over 97 school buses under the Clean School Bus Program will be a tremendous boost to its annual unit outputs.
The company has also been upfront in strategizing how to meet the expected surge in demand, having recently secured a $50 million government loan to establish the Mirabel battery factory. With these projections, it is startling how LEV is one of the undiscovered EV stocks in the Wall Street corridors.
Polestar (PSNYW)
Polestar (NASDAQ:PSNYW) is a Swedish EV company known for its three main bands: Polestar 3 SUV, Polestar 2 Fastback, and Polestar 4 SUV Coupe. Still a penny stock, Polestar is trading at extremely low prices. Its stock price has lost almost 90% of its value since going public and merging with a SPAC in 2022. Adding to its endless woes, Polestar has seen continuous struggles with supply chain constraints.
Even with these value chain challenges, Polestar has seen a steady increase in its production capacity, with its total vehicle production rising by 6% in 2023 to hit 54,600 units. While the increase represents less than half of the projected output before the merger, recent critical strategic turns may bring Polestar to new heights.
The developing trends that have seen the EU and China battling out on tariffs could favor many European EV brands. These developments provide Polestar with a strategic advantage to ramp up production and meet the market gap that may be left by the decrease in Chinese EVs in Europe.
Polestar recently announced it’s adopting a “non-genuine” sales model, allowing dealers to set their prices, and customers to haggle prices. These developments will prime Polestar’s stock. For industry analysts, Polestar is one gem to consider investing in, even though it’s still cheap.
LiveWire Group (LVWR)
LiveWire Group (NYSE:LVWR) is also known as the “Tesla of Motorcycles,” having entered the unique electric motorcycle industry with every kind of disruption.
The company has been upfront in structuring its operations to meet the shifting consumer needs. This is a move that has seen it drastically reduce the price of its flagship product, LiveWire ONE, to just below $20,000, factoring in the federal tax credits.
Although the company registered a consolidated net loss of $109.6 million in the last quarter of 2023, every indicator points to greater expansion prospects.
Last year saw a staggering 15% increase in sales of LiveWire ONE, with the sharp rise as informed by the initial separation of LiveWire from the parent company Harley-Davidson and a competitive initial MSRP below the industry range. It leaves no doubt that LiveWire is one of the undiscovered EV stocks Wall Street has yet to dig into.
On the date of publication, Joel Lim 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.
