In this article, we discuss the 10 most popular EV stocks among famous hedge funds. If you want to skip our detailed analysis of the EV market, go directly to 5 Most Popular EV Stocks Among Famous Hedge Funds.
In 2020, 5% of the new car sales were attributed to electric vehicles, and the number of EV units sold are expected to reach over 5 million in 2021. China and Europe were the leading markets for electric vehicles in 2020, with purchases of EVs amounting to approximately 1.2 million in China and 1.4 million in Europe, which was 4 times higher than the US sales. It has been forecasted that as climate change, net-zero emissions, and clean energy become more significant for people, electric vehicles will account for 48% of the total vehicles sold in 2030.
Europe’s overall car market dipped by 22% in 2020, but the registrations for electric vehicles were at an all time high of 1.4 million. It was observed that European automakers who were manufacturing electric vehicles were offered government subsidies and stimulus packages to counter the COVID-19 pressures, since 2020 was the year that the European Union put a restriction on average carbon dioxide emissions per kilometer driven for new cars.
Several companies have set net-zero emissions targets for the near future including market leaders like Apple Inc. (NASDAQ:AAPL), Ikea, Verizon Communications Inc. (NYSE:VZ), Barclays PLC (NYSE:BCS), Microsoft Corporation (NASDAQ:MSFT), Unilever PLC (NYSE:UL), and Royal Dutch Shell plc (NYSE:RDS-A). These companies have the resources to invest in EVs for transportation and deliveries, since electric vehicles play a significant role in the ambitious objective of zero emission targets.
Not only electric cars for personal use are trending, but companies are shifting towards electric trucks for deliveries, and demand for electric bikes and scooters more than doubled in 2020, with majority of the customers belonging to the US, China, and Europe.
As the trend for electric vehicles becomes a common phenomenon, all major companies in the EV ecosystem will see a boost in demand. Companies offering charging stations, batteries, semiconductors, and other relevant products and services are set to see a spike in operations. Bloomberg stated in a November 24 story that the electric vehicle space is expected to deliver IPOs valued at approximately $100 billion by the end of 2023. As the EV space gains more recognition, hedge funds are increasing their stakes in these companies.
The most popular EV stocks among famous hedge funds include Plug Power Inc. (NASDAQ:PLUG), Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and QuantumScape Corporation (NYSE:QS), among others discussed in detail below.
Our Methodology
We chose the 10 best EV stocks that are most sought after by hedge funds and have mostly positive analyst ratings to create this list.
The hedge fund sentiment around each stock was gauged from a total of 867 elite funds tracked by Insider Monkey in Q3 2021.
Most Popular EV Stocks Among Famous Hedge Funds
10. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders: 20
Headquartered in Beijing, China, Li Auto Inc. (NASDAQ:LI) is a manufacturer of premium and smart electric vehicles, making the company an innovator in China’s new energy vehicle market.
In the third quarter of 2021, the smart money increased stakes held in Li Auto Inc. (NASDAQ:LI). 20 hedge funds in the database of elite funds maintained by Insider Monkey were bullish on Li Auto Inc. (NASDAQ:LI), holding stakes worth $468.1 million. This is compared to the same number of funds holding stakes in Li Auto Inc. (NASDAQ:LI) in the preceding quarter, valued at $457.4 million. Josh Resnick’s Jericho Capital Asset Management is one of the leading Li Auto Inc. (NASDAQ:LI) stakeholders from Q3, holding a $122 million position in the company.
Tiger Securities analyst Bo Pei on December 8 initiated coverage of Li Auto Inc. (NASDAQ:LI) with a Buy rating and a $40 price target. The analyst observes that extended-range EVs offer an attractive value proposition to buyers, which should assist Li Auto Inc. (NASDAQ:LI) gain considerable market share.
On November 29, Li Auto Inc. (NASDAQ:LI) posted earnings for Q3. EPS in the period totaled $0.05, beating estimates by $0.04. The $1.22 billion quarterly revenue jumped 220.23% year-over-year, exceeding estimates by $86.37 million.
Just like Plug Power Inc. (NASDAQ:PLUG), Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and QuantumScape Corporation (NYSE:QS), Li Auto Inc. (NASDAQ:LI) is a sought-after EV stock among famous hedge funds.
