Market performance for EV stocks has been down so far this year but that’ll likely change soon
The electric vehicle market is growing rapidly, with several electric cars being released in the past few years. In this article, we will be looking at some of the top electric vehicle stocks and how they rank against each other.
Electric vehicles are not just for greenies anymore. They have become a viable option for anyone who wants to drive their car and save money on gas.
The automotive industry has been changing for decades now, with innovations coming out every year. The last decade has seen an unprecedented shift in how the automotive industry works, with many companies moving towards electrification and mobility solutions that are more sustainable.
However, in recent months, electric vehicle stocks have taken a battering. It makes sense. The broader markets have been in disarray since the start of the year. The Federal Reserve wants to bring inflation down with more interest rate increases. Whether or not it can succeed remains to be seen, but with a constant barrage of hikes, this is one strategy being considered for the year. In addition, geopolitical issues like the Russia-Ukraine crisis are also weighing down growth stocks in the EV sector.
This is a great time to invest for the value investor, though. Companies with extraordinary valuations are finally trading at reasonable valuations. Therefore, the time to build your portfolio with forward-looking EV investments is now.
Here are the top 10 electric vehicle stocks ranked by their overall potential and fundamentals:
- General Motors (NYSE:GM)
- Toyota (NYSE:TM)
- Ford (NYSE:F)
- Volkswagen (OTCMKTS:VWAGY)
- Tesla (NASDAQ:TSLA)
- Blink Charging (NASDAQ:BLNK)
- XPeng Motors (NYSE:XPEV)
- Nio (NYSE:NIO)
- Rivian Automotive (NASDAQ:RIVN)
- Lucid Group (NASDAQ:LCID)
Electric Vehicle Stocks: General Motors (GM)
General Motors has been a pioneer in the automotive industry since 1908. The company has been a major source of employment and revenue for many communities worldwide. With its deep pockets, General Motors has been able to revolutionize the automotive industry and change the game.
Recently, General Motors has taken a step back from traditional automotive manufacturing and focused more on electric vehicles.
There are several initiatives that the company has unveiled that will help it compete in a world that is increasingly tilting toward electric and autonomous vehicles. It recently upped its investment in those vehicles from 2020 through 2025 to $35 billion. If CEO Mary Barra has her way, there will be 20 new electric vehicle models in America and 30 on the global stage by 2025.
In fact, GM announced last week that it is buying out all of SoftBank’s ownership in GM’s autonomous vehicle business, Cruise. GM will pay SoftBank $2.1 billion in cash for its stake and GM will now make the $1.35 billion investment in Cruise instead of SoftBank, Morningstar Sector Strategist David Whiston reported yesterday.
GM stock is down almost 26% in the year-to-date and trades at a price-to-forward earnings ratio of 6.2.
Overall, General Motors is a great company that creates many satisfied customers. Last year, General Motors sold approximately 6.3 million cars, a slight dip over the year-ago numbers but a solid number. In comparison, Tesla sold 936,172 vehicles globally in 2021. So, even though Tesla is hyped, GM is still in a different league.
Toyota (TM)
Toyota has been around for over 100 years, with the first car produced in 1937. The company has grown to become one of the largest companies with many products and services.
Toyota was founded by Kiichiro Toyoda, born into a farming family and had no previous experience in manufacturing cars or any other vehicle. He became fascinated by cars after seeing one at an exhibition in 1915 and decided to create his car using parts he bought from suppliers on credit and sold them to friends at home for use as taxis.
Toyota has been a leader in the automotive industry for many years, but it has also been a pioneer in other fields such as robotics, aerospace, and artificial intelligence. Toyota’s AI research lab is known for developing autonomous driving technology.
Like all the other major car companies globally, Toyota is ramping up investments in electric vehicles. Toyota will pour 4 trillion yen into its electric vehicle investments. The goal is to create a 30-vehicle lineup of 100% battery-operated EVs by 2030. The EV maker has an ambitious goal of selling 3.5 million units per year by 2030. At this point, hybrid EVs constitute the bulwark of the company’s EV sales. However, they want to move towards battery-powered electric vehicles, so they are aggressively looking to build out their portfolio.
TM stock trades at a price-to-forward earnings ratio of 8.9 after the shares have declined 6.3% this year.
Electric Vehicle Stocks: Ford (F)
Ford is an iconic car company that has been around for over a century. It was founded by Henry Ford in 1903 and innovated in the automobile industry ever since. Today, it is one of the most successful companies in America.
Ford’s Mustang has been around for more than 50 years and is one of their most popular cars. John Najjar originally designed it as a concept for a low-cost sports car that could compete with other sports cars on the market. However, it became an instant hit among American consumers when it was first introduced.
Ford is now investing heavily in electric vehicles, which are more environmentally friendly than traditional gas-powered cars. CEO Jim Farley says Ford intends to produce 600,000 units globally in 2023 and over 2 million units per year by 2026.
Even the Mustang’s been brought into the electric realm, with the 2022 Mach-E getting an Editors’ Choice award last month from industry bible Car and Driver.
In recent years, Ford has fallen out of favor a bit. This is due to an increase in competitors trying to offer more to their customers than what Ford is currently offering. However, in terms of cars and personal transportation, Ford still reigns supreme as one of the best brands. Therefore, it ranks as one of the best electric vehicle stocks.
F stock is down almost 21% in the year-to-date and trades at a price-to-forward earnings ratio of 7.81.
Volkswagen (VWAGY)
Volkswagen is a German automobile manufacturer founded in 1937.
Volkswagen’s first-ever car was the Type 1, a simple rear-engine vehicle designed by Ferdinand Porsche. The vehicle was designed for use as a cheap mode of transportation for the masses and became an icon of the 20th century.
The Volkswagen Group is now one of the largest automobile companies globally.
Europe is examining the problems of climate change more than any other continent. As a result, their car manufacturing industry has become one of the most well-respected and innovative globally. This leaves Volkswagen at an advantage because they can produce high-quality vehicles for a huge market.
Volkswagen has announced its commitment to building and selling electric cars by 2025 at 35 billion euros. It will put it in a great position to compete with the other major EV makers.
VW stock, traded as American depositary receipts (ADRs), is down 16.1% so far in 2022. The ADRs are currently valued at 6.84 times forward earnings.
Electric Vehicle Stocks: Tesla (TSLA)
Tesla is a pioneering American automaker and energy company founded in 2003 by Elon Musk. The company manufactures electric cars and batteries for homes and businesses. Tesla has been working on self-driving cars, solar roofs, battery storage, etc.
Tesla is a pioneer in the auto industry and the technology industry. With its innovation, Tesla has revolutionized the automotive industry with its electric cars powered by lithium-ion batteries.
In addition, Tesla is really on the ball when implementing new technologies in their self-driving cars. Their goal is to eliminate human error from highways by completely removing them with their technology.
The only reason that Tesla is not number one on this list of best-performing stocks is that their stock price has risen too high. InvestorPlace contributor Dana Blankenhorn wrote a great article on the stark gap between the company’s fundamentals and market capitalization. TSLA stock’s market cap is currently $952.03 billion after sliding 12.8% so far in 2022.
The company’s success is often not attributed to its business model and financial performance but rather to the hype around Elon Musk and his vision of sustainable energy. Hence, it cannot get top marks among electric vehicle stocks.
Blink Charging (BLNK)
Blink Charging is a company that provides electric vehicle charging stations in the US. They have created an app that allows drivers to find and pay for charging stations near them.
BLNK stock is down 7.32% year-to-date, valued at a price-to-book ratio of 5.01.
Blink Charging is a company that provides electric vehicle charging stations in the US. They have created an app that allows drivers to find and pay for charging stations near them. The Blink Charging app is designed to help drivers locate, reserve, and pay for Blink’s fast-charging electric vehicle (EV) chargers. Drivers can also add their Blink account, so they can charge their vehicles anytime without worrying about finding a charger again.
The company has partnered with businesses all over the country to provide EV chargers at their locations and other places like hotels, restaurants, shopping centers, and workplaces.
In terms of business, Blink Charging is firing on all cylinders. It recorded revenues of $7.9 million in Q4 of 2021, up 224% over the prior year and 24% from the previous quarter. For the full year, revenue jumped 236% from the year-ago period.
For investors looking to figure out how to build a portfolio around electric vehicle stocks, giving some attention to several top pick-and-shovel plays will not hurt. That is where Blink Charging will come into play.
Electric Vehicle Stocks: XPeng Motors (XPEV)
China has been a major player in the world of electric vehicles. The country is home to some of the biggest automakers and car companies in the world. China’s government has been pushing for more environmentally friendly cars, which have helped to fuel this industry.
Beijing’s government has been pushing for more environmentally friendly cars, which have helped to fuel this industry. China will be home to around 20 million electric cars by 2030, according to one report, and it is also looking into other alternative fuels such as hydrogen and natural gas as well as renewable energy sources such as solar power.
Under this umbrella, several Chinese EV makers are doing well. Nio is normally the go-to Chinese stock in the space. However, since growth is slowing for NIO, it is better to look into XPEV stock at the moment. In February, deliveries for the company rose 180% from the year-ago period, while NIO sales grew by just 9.9%.
Nio (NIO)
China is one of the most important markets for stocks. Even though China has been a volatile market, it is important to understand the regulatory activity and pressure Chinese stocks face. NIO stock, traded as American depositary receipts, have dropped more than 36% this year.
The Chinese government has been very active in regulating and restricting the stock market. This regulatory activity can be seen as a sign of the government’s intention to protect its citizens from potential losses. Unfortunately, the level of legislation is not for everyone. Therefore, Chinese stocks are under pressure, and Nio is no expectation. However, we have to treat each investment on its merits.
Nio is often touted as China’s version of Tesla. Its electric car provides the comfort of a luxury vehicle while paying homage to Chinese design. It has achieved success in the Chinese market without having an established brand, which is rare for a new company in China. They can do this because of their partnership with Tencent (OTCMKTS:TCEHY), which understands how the Chinese market works and how to navigate it.
NIO delivered 91,429 cars last year and saw an increase of 109.1% over the year-ago figures. Although growth has slowed in the year thus far, analysts expect the momentum to recover with three new vehicle model launches.
Electric Vehicle Stocks: Rivian Automotive (RIVN)
Like several other electric vehicle start-ups, Rivian Automotive took advantage of the SPAC boom to list shares. However, the company is often hailed as the next Tesla, so ignore it at your peril.
Its backers include giants like Amazon (NASDAQ:AMZN), Ford, and BlackRock (NYSE:BLK). The company is pursuing a two-pronged strategy. On the one hand, Amazon has ordered 100,000 electric delivery vans from Rivian, and it’s as part of their endeavor to “go green.” Rivian enjoys a great relationship with the tech giant and can leverage it to a great advantage. In addition, Rivian is building electric cars for different customer segments, hoping to capture market share over there as well.
InvestorPlace contributor Larry Ramer last week advised that after RIVN stock’s recent drop, the shares’ valuation is very attractive. “Way too much is being made of Rivian’s supply issues and way too little is being made of its success on the demand side. Over the long term, the supply issues will more than likely be solved,” he wrote.
Lucid Group (LCID)
Lucid Group is a company that specializes in electric cars. It was founded in 2007 and had been growing steadily ever since. The company produces high-quality, eco-friendly vehicles with advanced features like self-driving, autonomous driving, and autonomous parking designed to make driving safer for drivers and passengers alike.
LCID stock debuted on the public markets through a reverse merger. It combined with Churchill Capital Corp, a special purpose acquisition company backed by SPAC specialist Michael Klein.
There are several reasons to like the company. Lucid has former chief engineer of the Model S under Elon Musk, Peter Rawlinson, at the helm of their company. Lucid Air has an impressive range of 520 miles, more than any other electric car. It is also looking to launch a new SUV called Gravity.
However, Lucid has been in a bit of trouble recently. It has slashed its production budget by almost 40% for the current fiscal year. Since the company is developing, these missteps will prove costly, so the sentiment is turning bearish on this one.
This article originally appeared at InvestorPlace.
On the publication date, Faizan Farooque 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.
