In this article, we discuss the 10 EV stocks to invest in. If you want to read about some more EV stocks, go directly to the 5 EV Stocks to Invest In.
The electric vehicle industry has come a long way in the past few years. In 2021, there were a record 6.6 million sales of EVs around the world, doubling from 2020, and a league apart from the 120,000 sold in 2012. The sales of EVs in 2021 also accounted for nearly 10% of global car sales, marking another important milestone for the fastest-growing sector in the clean energy economy. The International Energy Agency estimates that the total number of EVs on the roads is now in excess of 16 million, up three times from the number in 2018.
Some of the stocks that have benefited from this boom for the EV world include Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX). A large part of the increase in EV adoption is concerted policy changes on the international and national levels. According to the IEA, public spending on subsidies and incentives for EVs nearly doubled last year to nearly $30 billion. This number is likely to rise further this year.
The rise of electric vehicles has also led to the ascent of EV materials stocks. The global EV charging market is expected to grow to $190 billion in value by 2030, representing one-tenth of the global gasoline market presently. The markets for EV mining and electric trucks are also expected to grow in the coming years. Other firms that complement the EV sector, like semiconductors and software, will benefit from this boom too. Automakers are already scrambling to secure EV material supply chains as the EV revolution marches on.
Our Methodology
The companies that operate in the EV sector and have upcoming growth catalysts were selected for the list. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
In this article, you will many stocks that are operating in the EV materials domain.
Photo by Kumpan Electric on Unsplash
EV Stocks to Invest In
10. Nano Dimensions Ltd. (NASDAQ:NNDM)
Number of Hedge Fund Holders: 8
Nano Dimensions Ltd. (NASDAQ:NNDM) provides additive electronics in Israel and internationally. The company has become popular among EV firms because of DragonFly, a lights-out digital manufacturing system that produces circuit-boards, antennas, and sensors for prototyping. In late May, the company announced plans for a share repurchase program worth around $100 million, boosting the shares as the EV industry fell in importance among investors due to the overall economic environment and inflation.
On September 1, Nano Dimensions Ltd. (NASDAQ:NNDM) posted earnings for the second quarter of 2022, reporting a revenue of $11.1 million, up 1,270% compared to the revenue over the same period last year.
At the end of the second quarter of 2022, 8 hedge funds in the database of Insider Monkey held stakes worth $74 million in Nano Dimensions Ltd. (NASDAQ:NNDM), compared to 10 the preceding quarter worth $100 million.
Just like Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX), Nano Dimensions Ltd. (NASDAQ:NNDM) is one of the stocks that elite investors are buying.
9. Allison Transmission Holdings, Inc. (NYSE:ALSN)
Number of Hedge Fund Holders: 25
Allison Transmission Holdings, Inc. (NYSE:ALSN) makes and sells automatic transmissions for commercial and military vehicles. In late August, the company announced that it had won a contract worth more than $6.5 million from the United States Army for the development of an electric hybrid sub-system in the next generation of electrified transmission for armored combat vehicles. The system will feature a 220 KW electric motor and associated inverter for on-board vehicle power, per the firm.
On July 12, JPMorgan analyst Tami Zakaria maintained an Underweight rating on Allison Transmission Holdings, Inc. (NYSE:ALSN) stock and lowered the price target to $39 from $41, cutting the 2023 growth estimates for the sector as well.
At the end of the second quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $401 million in Allison Transmission Holdings, Inc. (NYSE:ALSN), compared to 29 in the previous quarter worth $393 million.
In its Q1 2021 investor letter Oakmark Funds, an asset management firm, highlighted a few stocks and Allison Transmission Holdings, Inc. (NYSE:ALSN) was one of them. Here is what the fund said:
“Allison Transmission Holdings, Inc. (NYSE:ALSN) is a niche industrial company with roughly 80% market share in truck transmissions. Its products provide the company’s customers with critical advantages, including fuel economy, reduced emissions, reliability and total-cost-of ownership. The importance of Allison Transmission’s products and its dominant market position have historically given it strong pricing power. Yet, in the year leading up to our purchase, the company’s shares underperformed peers by more than 40 percentage points. Although we believe the company’s fundamentals are still as strong, if not better, than its peers, investors have worried about how commercial vehicle electrification will affect Allison Transmission’s long-term business. We believe that the company’s investments in next-generation products will enable it to maintain its position as an industry leader, even as technologies change. Furthermore, we believe that our investment carries limited downside risk because Allison Transmission’s shares sell at 10x free cash flow, which ascribes almost no value to the future. In addition, the company’s management team diligently returns capital to shareholders.”
8. MP Materials Corp. (NYSE:MP)
Number of Hedge Fund Holders: 26
MP Materials Corp. (NYSE:MP) owns and operates rare earth mining and processing facilities. On August 4, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $0.43, beating market estimates by $0.08. The revenue over the period was more than $143 million, up over 96% compared to the revenue over the same period last year and beating analyst estimates by $14 million. The earnings beat of the firm was influenced by a 90% rise in the prices of rare earths in the quarter.
On August 5, Baird analyst Ben Kallo maintained an Outperform rating on MP Materials Corp. (NYSE:MP) stock and raised the price target to $55 from $45, noting the company continues to execute nicely.
At the end of the second quarter of 2022, 26 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in MP Materials Corp. (NYSE:MP), compared to 25 in the preceding quarter worth $3.5 billion.
In its Q1 2021 investor letter, Bernzott Capital Advisors, an asset management firm, highlighted a few stocks and MP Materials Corp. (NYSE:MP) was one of them. Here is what the fund said:
“MP Materials (NYSE:MP): This rare earth specialty materials company reported solid earnings driven by higher production and selling prices of neodymium-praseodymium (NdPr), a vital component for the development of magnets used in EV production, wind turbines, drones, robotics, and other industrial applications. Also contributing were offtake agreements with General Motors for magnets and expansion plans for domestic production of magnets making MP the only domestic producer. The balance sheet and cash flow generation remain strong, supportive of expansion plans in the current NdPr pricing environment.”
7. BorgWarner Inc. (NYSE:BWA)
Number of Hedge Fund Holders: 31
BorgWarner (NYSE:BWA) provides solutions for combustion, hybrid, and electric vehicles worldwide. In early August, the firm announced that a manufacturer in Europe had reached an agreement with the firm to provide power solutions for a range of heavy-duty electric trucks it plans on debuting. As part of the deal, the company has agreed to provide the European firm with the ultra-high energy battery system, a product that reportedly offers a 50% increase in energy density over its predecessor.
On September 9, Bank of America analyst John Murphy maintained a Buy rating on BorgWarner (NYSE:BWA) stock and lowered the price target to $75 from $78, noting that supply chain issues would pressure auto volumes in the coming months.
At the end of the second quarter of 2022, 31 hedge funds in the database of Insider Monkey held stakes worth $182 million in BorgWarner (NYSE:BWA), compared to 27 the preceding quarter worth $150 million.
In its Q1 2021 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and BorgWarner (NYSE:BWA) was one of them. Here is what the fund said:
“BorgWarner (NYSE:BWA) is a longtime auto supplier that is investing to extend its competitive advantage. The company is currently one of the world’s top three producers of turbochargers, used in internal combustion engines (ICEs) to achieve higher performance with greater fuel efficiency. Over the past 20 years, the company’s success in this market has helped BorgWarner to grow faster than the overall auto industry.”
6. TE Connectivity Ltd. (NYSE:TEL)
Number of Hedge Fund Holders: 35
TE Connectivity Ltd (NYSE:TEL) manufactures and sells connectivity and sensor solutions. Some of the products that the firm markets to the electrical vehicle industry include terminals, connector systems, antennas, and relays, among others. In earnings results for the second quarter of 2022, posted on July 27, the firm reported earnings per share of $1.86, beating market estimates by $0.11. The revenue over the period was $4.1 billion, beating analyst estimates by around $200 million.
On August 1, Evercore ISI analyst Amit Daryanani maintained an Outperform rating on TE Connectivity Ltd (NYSE:TEL) stock with a price target of $145, noting that orders were starting to decline for the firm.
At the end of the second quarter of 2022, 35 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in TE Connectivity Ltd (NYSE:TEL), compared to 38 in the previous quarter worth $1.7 billion.
In addition to Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX), TE Connectivity Ltd (NYSE:TEL) is one of the stocks that hedge funds have on their radar.
In its Q1 2022 investor letter, Carillion Tower Advisers , an asset management firm, highlighted a few stocks and TE Connectivity Ltd (NYSE:TEL) was one of them. Here is what the fund said:
“TE Connectivity (NYSE:TEL) shares weakened on the back of global auto production issues due to the war in Ukraine. Further, fears are rising that a recession in Europe could hinder demand for autos and undermine the company’s largest end-market.”
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Disclosure. None. 10 EV Stocks to Invest In is originally published on Insider Monkey.
