Electric vehicle stocks are all the rage in 2022. Hey, it’s true! If you’ve paid any attention to the financial markets over the past year, you’ll already know that the electric vehicle sector is probably one of the most talked about industries amongst investor circles. It all starts with the industry leader in Tesla (NASDAQ: TSLA). They’ve not only transformed the automotive industry, but have revolutionized how we think about renewable energy resources.
Electric Vehicle Sector
- The shift in the global focus on clean energy and electric vehicles has never been stronger. With nearly every automaker in the world joining in, investors need to begin to think about how they can capitalize on this. People who previously invested in the automotive industry, may not recognize some of the newer brands that make up the new electric vehicle landscape.
Many of these are startups, and a savvy investor will be able to spot the potholes like Nikola stock (NASDAQ:NKLA) or the fast lane investments like Nio (NYSE:NIO) on the long road to a successful investment.
So where can we look as investors for value? That depends on your style of investing. Are you a long-term investor or a short-term trader?
Finding the companies you believe in long-term is an excellent way to grow your portfolio over time. Everyone’s looking for the next Tesla.
But what if there is only ever one Tesla? Sometimes it’s not always the maker of the product that’s the best investment.
But other factors like the resources needed or the maintenance after the car is on the road. Let’s take a look at some of the obvious and not so obvious ways we can invest in this red-hot market.
Electric Vehicle Automakers
Tesla (NASDAQ:TSLA) is one of, if not the hottest stock of the year. In fact, everyone and their dog was buying up Tesla as much as they could.
There’s a reason the stock is up over 330% this year and is currently down by about 20% from its 52-week highs. Tesla even split its stock 5:1 back in August. The stock price had skyrocketed too high too fast.
Tesla is the clear industry leader at this time and has the advantage of being the very aggressive first mover with literal first wheels on the roads.
Tesla is not just a car maker anymore. It’s a legitimate way of life for some people and has become a brand that people identify a certain status level with.
Tesla fanboys follow Elon Musk like he’s a celebrity. And sure they get mocked for it, but nobody can argue about the quality of a Tesla car.
$TSLA is More Than Meets The Eye
And Tesla is so much more than cars too. It’s positioning itself as a disruptor in the energy sector with its solar panels and rechargeable battery technology.
A Biden administration can only come as a good thing for Tesla in the long run. The Democrats are already pledging $2.2 trillion in funding to shift America’s focus to clean and renewable energy sources.
Is the stock overvalued? If you think a price to earnings ratio of 817 is overvalued, then yes it definitely is. But Tesla is the brand that the world associates with electric vehicles.
And while much of the speculation for the future may be baked into the stock price, Tesla should only grow as a company from here. Checkout our recent tesla stock analysis.
Best Electric Vehicle Stocks To Buy: $NIO
NIO (NYSE:NIO) is perhaps the company that most investors believe has a shot to be the next Tesla. Or China’s answer to Tesla.
They’re positioned to take a huge market share of the largest automobile market in the world. Why does Nio have an edge over Tesla in China?
Government subsidies on buying domestically produced electric vehicles have caused a shift in demand towards China-based ev makers.
So much so that Tesla has recently lowered its prices of the Model 3 and Model S in China. Why else? Because the Chinese Government itself invested in Nio.
In fact, they’re one of its earliest stakeholders. The Chinese conglomerate Tencent also owns 15% of Nio. So you’re starting to get the picture as to why Nio is set up for success.
Nio also has some unique technology that sets it apart from its competitors as well. Its battery swap is great for drivers on the go who don’t want to sit around and wait for their car to charge.
The recurring revenue from this subscription service creates a nice razor and blade model for Nio to capitalize on. Nio is also building drive-in charging stations where drivers can just wait in their cars without having to even get out.
Finally, in January of 2021, Nio is holding its NIO day. Perhaps an homage or perhaps a jab at Tesla’s annual Battery Day event. Nio is expected to unveil a new premium sedan.
It’ll be called the ET7. Which should act as a direct competitor to Tesla’s Model S. Next year also marks Nio’s plans to expand into Europe.
It’s expected they’ll meet resistance from automakers like Volkswagen. Still, Nio has the funding and political strength behind it to be a consistent force in the global electric vehicle market for years to come.
Some EV Stocks You May Not Have Heard Of
Hyliion (NYSE:HYLN): You may know this under its SPAC IPO ticker symbol of SHLL. They merged with Tortoise Acquisition company in October to trade on the public markets.
Hyliion is in the electric truck game. An industry that should see booming growth over the next few years with big names like Tesla and Volvo getting into the market.
Things are looking up as California and New York have made strong moves towards electric vehicles. In fact, they’re providing rebates for companies who buy clean energy trucks.
Is the stock a must-buy? Not exactly. But the opportunity for growth in an industry that in its infancy is mighty tempting.
Fisker Inc. (NYSE:FSR): A very new company to the public markets, Fisker is another electric vehicle maker with a twist. Fisker vehicles, like the luxury SUV called the Ocean, are actually being produced by another company.
This seriously cuts down on the costs of Fisker needing to build production factories. And some analysts are expecting Fisker to be free cash flow positive by 2024.
Workhorse Group Inc (NASDAQ:WKHS): A serious contender for the last-mile delivery sector, Workhorse Group builds delivery trucks that are used by UPS and Ryder.
Workhorse is hopeful of obtaining the contract for USPS’ new delivery fleet as well. This would seriously boost its market share.
Workhorse is also in talks with the FAA to get their Horsefly delivery drone involved in the last-mile delivery business. Workhorse also owns 10% of the newly public company Lordstown Motors.
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