The 3 Most Undervalued EV Stocks to Buy in July 2024

  • Undervalued EV stocks offer growth potential in an expanding market.
  • BYD Company (BYDDF): Dominant force in EV space with international expansion plans.
  • Li Auto (LI): Showing resilience with steady delivery growth and strong financials.
  • Lucid Group (LCID): Luxury EV maker focusing on efficiency and market expansion.
undervalued EV stocks - The 3 Most Undervalued EV Stocks to Buy in July 2024

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The electric vehicle (EV) industry continues to evolve rapidly, with significant trends shaping its future in 2024. Despite some fluctuations in consumer demand, the global market for EVs remains robust. Key trends include a steady increase in EV sales, driven by technological advancements and supportive regulatory frameworks to reduce emissions. This backdrop forms my list of three undervalued EV stocks to buy.

Moreover, competition among manufacturers intensifies, leading to price cuts and improved consumer affordability. This trend is particularly evident in China, where domestic companies leverage an integrated supply chain to offer competitively priced models​.

For those interested in investment opportunities, the current market dynamics suggest several undervalued EV stocks to consider. I’ve compiled a list of three companies that I feel will be the leaders of tomorrow. These companies trade at attractive valuations and could be long-term winners for patient investors.

BYD Company (BYDDF)

A close-up view of the power supply plugged into a vehicle from BYD Company (BYDDY).
Source: J. Lekavicius / Shutterstock.com

BYD Company (OTCMKTS:BYDDF) has seen a significant sequential decline in revenue and profits from Q4 2023 to Q1 2024. While this drop is attributed to seasonality factors around the Chinese New Year holiday, a 30.6% quarterly decrease in revenue and a 47.33% fall in net income are still quite steep. The year-over-year growth figures of 3.97% for revenue and 10.62% for net profits are more positive but not exceptionally strong.

Still, despite this short-term weakness, BYDD will remain a dominant force in the EV space amid recent developments, making it one of the top undervalued EV stocks to buy.

The company signed a deal to open a $1 billion EV factory in Turkey. The new factory, which will have an annual capacity of 150,000 electric cars and an R&D center, is part of BYD’s international expansion strategy and strengthens its presence in Europe. 

BYD also aims to sell affordable EVs in Europe, such as the Seagull, estimated to cost around 20,000 euros each. Due to its scale and ability to undercut and outscore its more expensive competitors, such as Tesla (NASDAQ:TSLA), it may remain the largest EV manufacturer.

Li Auto (LI)

Li Auto (Li Xiang) brand logo and electric car in store. A Chinese EV(electric vehicle) company
Source: Robert Way / Shutterstock.com

Li Auto (NASDAQ:LI) has shown resilience, steady delivery growth and strong financials. The company focuses on expanding its model lineup and technological advancements.

LI could be considered one of those undervalued EV stocks for a few reasons. Li Auto did report year-over-year growth in Q1 2024, with revenues increasing 36.4% and gross profit rising 38% compared to Q1 2023. The company also maintained a healthy gross margin of 20.6%. Additionally, management provided relatively upbeat guidance for Q2 2024, forecasting 21-27% year-over-year delivery growth and a 4-9% revenue increase.

Also, with a trailing price-to-earnings (P/E) ratio of 13x and a forward P/E of 20x, Li Auto’s valuation multiples are quite low for a company growing revenues and profits rapidly. Many fast-growing companies trade at significantly higher P/E ratios. The price-to-sales ratio of 1.10 also suggests the stock is cheap relative to its top line.

Lucid Group (LCID)

Lucid Air Touring sedan display at the Service Center. Lucid Motors (LCID) is a manufacturer of luxury EV Electric Vehicles.
Source: Jonathan Weiss / Shutterstock.com

Lucid Group (NASDAQ:LCID), known for its luxury electric vehicles, focuses on increasing manufacturing efficiency and expanding market reach.

There are a few reasons LCID is among the undervalued EV stocks for investors. Lucid’s advanced EV technology, luxury branding and backing from the Saudi Public Investment Fund position it well to capture a meaningful share of the premium EV market. The company’s revenue growth forecast of 70.62% over the next five years indicates that analysts expect strong top-line expansion as Lucid scales up production and sales.

Lucid’s market cap of $7.29 billion is still a fraction of that of Tesla, the EV industry leader. If Lucid can execute its growth strategy and capture even a small portion of Tesla’s market share, its upside potential could be significant.

The company has $3.99 billion in cash and equivalents, resulting in a net cash position of $1.91 billion or 83 cents per share. This cash cushion should help Lucid fund its expansion plans and weather potential challenges as it ramps up operations, which positions it attractively for the future.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.


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