The EV megatrend is accelerating and these stocks represent the best bargains on the market
A revolution has to start somewhere.
And yesterday, the revolution of phasing out gas pumps in favor of EV charging stations started in a tiny California city by the name of Petaluma.
That city – which is located just north of San Francisco and is home to about 60,000 people – just passed legislation that permanently bans the construction of new gas stations.
Petaluma is the first city in the world to implement such a ban.
It won’t be the last…
Electric vehicles are taking over the world. Improving technology, falling costs, shifting consumer demand, increasing supply, and vigorous government support are all converging to set the stage for EVs to become ubiquitous by 2040.
This EV megatrend is only accelerating.
In addition to Petaluma outlawing new gas stations, the entire state of California recently banned the sale of new gas-powered cars by 2035. The state is also requiring that 75% of heavy-duty trucks sold locally be electric by 2035.
Clearly, California is on track to have an entirely “clean” vehicle fleet by the 2030s.
They won’t be alone.
New Jersey has a similar ban on gas-powered cars by 2035. New York City is banning new gas hookups by 2030. Michigan is going carbon-neutral by 2050. The state of Washington is pushing forward on a bill to ban new gas car sales by 2030.
America is pushing forward into an all-electric future.
And, believe it or not, the U.S. is way behind on this trend.
EV penetration in the U.S. hovers around 3%. Pretty much every country in Europe – and a handful of countries in Asia – are above that. Norway is above 60% EV penetration!
They’re not slowing down over there, either.
China’s EV sales are expected to rise 40% in 2021. Britain’s EV sales are expected to nearly double. Globally, EV sales are projected to rise 70% this year…
Folks, the writing is on the wall: EVs are taking over the world, and this march toward global domination is only accelerating.
So… when I see that many EV stocks have retreated significantly in recent weeks… I see a disconnect, between industry fundamentals (improving) and EV stock prices (falling).
Disconnects in financial markets are buying opportunities.
This one is no exception – and so I have my buying list ready.
At the top of that list are NIO (NASDAQ:NIO) and Tesla (NASDAQ:TSLA). These two companies continue to leverage industry-leading battery technology, premium branding, and production capacity to dominate the EV market. Both companies are growing very quickly, launching new products at an impressive pace, and expanding distribution and production. Both companies have great futures.
Recent weakness in both stocks equals golden buying opportunities.
Right below them are Lucid Motors (NYSE:CCIV), Canoo (NASDAQ:GOEV), and Fisker (NYSE:FSR). Lucid Motors is a very impressive company, with the talent, resources, expertise, technology, and vision to challenge Tesla in the EV sector at scale. Meanwhile, Canoo has developed a patented low-floor, steer-by-wire platform that could represent the future foundational architecture of self-driving electric cars everywhere.
Fisker is another top-notch new EV market entrant, with a unique “platform-sharing” business model that will enable the company to launch premium EVs at affordable price points.
And right below them is QuantumScape (NYSE:QS). This company is the unrivaled leader when it comes to making a new class of potentially game-changing solid-state batteries that could be the key to making EVs last forever and recharge instantly.
Charging companies Blink Charging (NASDAQ:BLNK), Chargepoint (NYSE:CHPT), EVBox (NYSE:TPGY), and Volta (NYSE:SNPR) are also near the top of my buy list. As electric vehicles take over the world, EV-charging infrastructure will replace traditional gas stations. This will not be a winner-take-all market. There are multiple, successful gas station operators today. There will be multiple, successful EV charging station operators tomorrow. That’s why buying this group makes sense.
I’m also a big fan of “tricycle” EV makers ElectraMeccanica (NASDAQ:SOLO) and Arcimoto (NASDAQ:FUV). Small cars have never sold well in America, sure, but times are changing – and with young, cash-strapped, eco-friendly, urban-dwelling consumers entering the auto market, demand for small, cheap, three-wheel EVs will surge in the coming years.
Battery technology companies Nano One Materials (OTCMKTS:NNOMF) and Romeo Power (NYSE:RMO) are both incredibly interesting. Each is working on potentially breakthrough technologies to optimize EV batteries.
Arrival (NASDAQ:CIIC) is the cream-of-the-crop when it comes to electric delivery vans. GreenPower Motor (NASDAQ:GP) is a great play on electric school buses and local transit vehicles. XL Fleet (NYSE:XL) is a compelling play the broader fleet electrification trend.
All of these companies have really bright future. All of their stocks have been stuck in multi-week downtrends.
The time to buy the dip is now.
The world is changing. Let’s forget the recent noise, and make sure we get on the right side of history.
Note: This article originally appeared at InvestorPlace. By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends.
On the date of publication, Luke did not have (either directly or indirectly) any positions in the securities mentioned in this article.