In this article, we discuss the 11 best EV stocks to buy for the long term. To skip the detailed analysis of the EV industry, go directly to the 5 Best EV Stocks To Buy For The Long Term.
Amid the recent slowdown in electric vehicle (EV) sales, the US Environmental Protection Agency (EPA) is taking major steps to speed up the transition from internal combustion engine (ICE) vehicles to EVs. On March 29, the EPA announced national greenhouse gas pollution standards for heavy-duty vehicles, covering model years 2027 through 2032. These standards are expected to lessen 1 billion tons of greenhouse gas emissions and provide $13 billion in annualized net benefits by 2032. The new regulations are also set to benefit public health, climate, and truck owners and operators. They will also reduce air pollution, especially for low-income households that live near the trucking routes. Moreover, with the new regulations, the heavy-duty industry is expected to achieve annual savings of $3.5 billion compared to costs of approximately $1.1 billion annually from 2027 to 2055.
In 2023, a decline in consumer preferences for EVs led many startups to perform abysmally. The promising EV startup Fisker Inc.’s (OTCMKTS:FSRN) stock price declined by approximately 90% since the beginning of 2024 and was eventually delisted from NYSE in March. However, the 2024 S&P Global Mobility report predicts an increase in affordable EVs, reliable charging infrastructure, and profitable returns for the current year. The report forecasts an increase in global sales of battery electric vehicles (BEV) to around 13.3 million units in 2024, representing 16.2% of the automotive industry’s market share. According to a Reuters report, there were around 9.5 million fully electric or BEVs sold in 2023.
One of the major hurdles in EV sales growth is production costs. The S&P Global Mobility report reveals that battery-grade lithium prices dropped by 60% in 2023. If the prices remain stagnant, EV costs can improve, but this drop in prices could also affect the mining firms which could lead to suspensions and delays in their projects.
Institutional Investors Still Bullish on Tesla
The market leader, Tesla, Inc. (NASDAQ:TSLA), was one of the top-performing stocks in 2023, gaining over 100%. The current year has not been as favorable toward the company as the stock has recorded over a 29% decline on a year-to-date basis as of March 28. Despite that, Altimeter Capital’s CEO, Brad Gerstner, sees this dip as a buying opportunity and has complete faith in Tesla, Inc. (NASDAQ:TSLA) and its CEO, Elon Musk. On CNBC’s “Fast Money Half-Time” report on March 27, Gerstner said that in the age of AI, betting on Elon Musk is a “no-brainer.” He is highly bullish on the company’s Full Self-Driving Beta v12 model. He said:
“I described it on Twitter as ‘When I took a test drive in it, it was kind of a ChatGPT moment.’ In fact, I think Michael Dell said something similar on Twitter. Why is that? Because they totally scrapped their prior deterministic models and moved to an imitation learning model that really, for the first time, unlike Waymo – which is still a deterministic model – feels like a human driving the car.”
Gerstner is optimistic about Tesla, Inc.’s (NASDAQ:TSLA) $199 monthly Full Self-Driving subscription service and said that it can be compared to the release of Apple Inc.’s (NASDAQ:AAPL) Apple Music streaming service from June 2015 and that this isn’t something that the company’s competitors can easily copy. Brad Gerstner added Tesla, Inc. (NASDAQ:TSLA) to his portfolio with $39 million worth of shares in the fourth quarter of 2023 and suggests buying more if the price dips further.
Apart from Brad Gerstner, Cathie Wood also seems to favor the stock as she purchased nearly $176 million worth of shares this year by March 14, as reported in our NASDAQ stocks with the biggest upside article. Additionally, Business Insider reported that Ark Invest bought $14 million worth of additional shares of the EV giant on March 28.
Another American EV manufacturer, Rivian Automotive, Inc. (NASDAQ:RIVN), is being favored by analysts amid a recent sell-off. As of March 28, the company’s stock price has dropped drastically and has declined over 91.5% since its IPO in November 2021. The company launched three new vehicles, the R2, the R3, and the R3X on March 7. On March 14, Piper Sandler analyst Alexander Potter upgraded the company’s stock to Overweight from Hold and raised the price target by $6 to $21. Potter still deems the stock a little risky but noted that Rivian Automotive, Inc.’s (NASDAQ:RIVN) R2 received 68,000 orders in less than 24 hours and said that R3 “could be one of the most compelling designs on the market when it is released.”
Earlier at Rivian Automotive, Inc.’s (NASDAQ:RIVN) Q4 earnings call, CEO RJ Scaringe made the following comments:
“We hold a deep conviction that the entire automotive industry will electrify over the long term. This means, as an industry, we’re replacing roughly 1.5 billion internal combustion passenger cars across the planet over the next couple of decades. Rivian’s mission is to accelerate this transition. Major goal with the launch of R1 was to build a brand that deeply resonates with customers. Beyond our active owner groups and the R1S being the top-selling EV in the US priced over $70,000, in owner satisfaction survey conducted by Consumer Reports, showed Rivian as the number one automotive brand with the highest likelihood for customers to purchase again.”
Despite the massive sell-offs, the electric vehicle industry has healthy long-term growth prospects, and some of the best EV stocks to buy for long-term include Blink Charging Co. (NASDAQ:BLNK), Polestar Automotive Holding UK PLC (NASDAQ:PSNY), and VinFast Auto Ltd. (NASDAQ:VFS). You can also check out the Top 15 Electric Bike Brands According to Reddit and the 20 Best Electric Cars of 2024.
11 Best EV Stocks To Buy For The Long Term
Our Methodology
For this article, we identified 34 stocks involved in the EV sector with market capitalizations of over $300 million through the Yahoo Finance stock screener. Next, we checked each stock’s price target on TipRanks and narrowed down our list to 11 stocks with the highest average analyst price target upside as of March 28. The stocks are listed in an ascending order of their average analyst price target upside.
Hedge fund sentiment around each stock has also been added. The hedge fund data was taken from Insider Monkey’s database of 933 elite hedge funds as of the fourth quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
11 Best EV Stocks To Buy For The Long Term
11. Stellantis N.V. (NYSE:STLA)
Average Analyst Price Target Upside: 6.93%
Number of Hedge Fund Holders: 33
Stellantis N.V. (NYSE:STLA) is a Netherlands-based company that designs, manufactures, and sells some of the most well-known cars in the world. The company manufactures vehicles under several brands, such as Alfa Romeo, Dodge, Maserati, Fiat, and several others. According to our previous article posted in August 2023, Stellantis N.V. (NYSE:STLA) was one of the top 15 EV companies by market share.
Stellantis N.V. (NYSE:STLA) has been covered by 20 Wall Street analysts over the course of the last three months and 14 analysts keep a Buy rating for the stock. The average analyst price target of the company is $30.26 and represents a 6.93% upside to its stock price as of March 28.
The hedge fund sentiment toward Stellantis N.V. (NYSE:STLA) was quite positive in the fourth quarter of 2023 as 33 hedge funds held a stake in the company at a combined value of $1.713 billion. This is compared to 27 hedge funds with stakes worth $585.417 million in the preceding quarter. As of December 31, 2023, Karthik Sarma’s SRS Investment Management is the most prominent stakeholder in the company, with nearly 8.468 million shares worth approximately $197.469 million.
Stellantis N.V. (NYSE:STLA) is one of the best EV stocks to buy for the long term, in addition to Blink Charging Co. (NASDAQ:BLNK), Polestar Automotive Holding UK PLC (NASDAQ:PSNY), and VinFast Auto Ltd. (NASDAQ:VFS).
Miller Value Partners made the following comment about Stellantis N.V. (NYSE:STLA) in its second quarter 2023 investor letter:
“We initiated a starter position in Stellantis N.V. (NYSE:STLA), which makes Jeep, Dodge and Fiat cars. The company has a nearly 8% dividend yield with enough net cash (cash minus debt) on the balance sheet to cover the dividend for almost five years. The company trades at 1.7x operating profits, which means the market is already expecting a likely drop in cash flow. Still, the shares appear to be worth meaningfully more than where they trade, and management is heavily aligned with stockholders with a 14% stake. They share our view that the valuation is compelling, as the company plans on repurchasing ~3% of shares outstanding this year.”
10. General Motors Company (NYSE:GM)
Average Analyst Price Target Upside: 10.61%
Number of Hedge Fund Holders: 83
General Motors Company (NYSE:GM) is one of the largest automotive companies in the world. The company makes some of the cheapest electric vehicles in the US (as mentioned in our best fuel-efficient cars report), such as the Chevrolet Bolt EV, Chevrolet Bolt EUV, and Chevrolet Equinox EV, whose base trims have a manufacturer’s suggested retail price (MSRP) of $30k or below.
As of the fourth quarter of 2023, General Motors Company’s (NYSE:GM) stock has been held by 83 hedge funds with positions worth $2.93 billion. This is compared to 66 hedge funds with positions worth $2.033 billion in the third quarter. As of Q4, 2023, Harris Associates owns 35.754 million shares of the company, valued at $1.284 billion.
On March 25, Mizuho analyst Vijay Rakesh raised General Motors Company’s (NYSE:GM) price target to $48 from $44, maintaining a Buy rating on the company stock. According to TipRanks, 20 analysts have covered the company stock over the last three months with an average price target of $50.16 and it implies a 10.61% upside from March 28 levels.
Diamond Hill Capital made the following comment about General Motors Company (NYSE:GM) in its Q3 2023 investor letter:
“Several of our bottom contributors were in the consumer area, including auto retailer CarMax and auto manufacturer General Motors Company (NYSE:GM). In general, rising interest rates have priced out a large portion of the population who simply can’t afford to buy a car given where financing costs stand today. These challenges have weighed on both companies. General Motors was also impacted by the UAW strike, which put a damper on the automotive industry in general.”
9. Tesla, Inc. (NASDAQ:TSLA)
Average Analyst Price Target Upside: 13.04%
Number of Hedge Fund Holders: 82
Tesla, Inc. (NASDAQ:TSLA) is a California-based company that has been the pioneer in the electric vehicle industry. According to the automotive business intelligence agency, JATO Dynamics, the company’s Model Y sold 1.23 million units in 2023 and became the best-selling car in 2023, dethroning Toyota Motor Corporation’s (NYSE:TM) Rav-4 and Corolla.
Tesla, Inc. (NASDAQ:TSLA) was held by 82 hedge funds in Q4, 2023, with positions worth $6.275 billion. As of the fourth quarter of 2023, Philippe Laffont’s Coatue Management is the most significant shareholder of the company. The firm owns over 4 million shares of the company worth $1 billion.
Tesla, Inc. (NASDAQ:TSLA) is the 9th best EV stock to buy for the long term. Based on the coverage of 35 Wall Street analysts, the average analyst price target of the company’s stock stands at $198.72. The price target shows an upside of 13.04% from the current levels as of March 28.
Tesla, Inc. (NASDAQ:TSLA) was mentioned by Tsai Capital Corporation in its fourth-quarter 2023 investor letter. Here is what the firm commented:
“Tesla has significant and underappreciated competitive advantages across multiple verticals including electric vehicles, software and energy storage. Misunderstood by much of Wall Street – and consequently a favorite of short sellers – Tesla continues to grow rapidly and increase its lead over the competition while delighting consumers in the process. [. . .] While we expect competition for EVs to intensify and for Tesla to lose market share over time, we also believe the company will increase production and deliveries from approximately 1.8 million vehicles today to approximately 15 million vehicles in 2030 and further its lead in autonomous driving capability. In fact, we expect Tesla will eventually license its autonomous driving software, creating high-margin (70-80%), recurring licensing revenue. Tesla is also one of only two companies that dominate the energy storage market, which has the potential to grow to several hundred billion in revenue as power plants around the world increase their focus on renewable energy.”
8. NIO Inc. (NYSE:NIO)
Average Analyst Price Target Upside: 55.33%
Number of Hedge Fund Holders: 20
NIO Inc. (NYSE:NIO) is a Chinese automotive company that primarily focuses on electric vehicle production and battery swapping stations. In 2023, the company’s vehicle deliveries increased by nearly 31% year-over-year to 160,038 units.
Based on the coverage of 16 Wall Street analysts, NIO Inc. (NYSE:NIO) has a Moderate Buy rating with an average price target of $6.99 and a high forecast of $10.40. The average price target shows a 55.33% upward change from its stock price of $4.50 at the time of writing on March 28.
As of December 31, 2023, 20 hedge funds have stakes worth $211.680 million in NIO Inc. (NYSE:NIO). This is compared to 18 hedge funds with positions worth $156.843 million in the preceding quarter. Jos Shaver’s Electron Capital Partners is the largest shareholder of the company as of the fourth quarter of 2023, with 4.43 million shares worth $40.18 million.
Ken Griffin’s Citadel Investment Group has increased its position in NIO Inc. (NYSE:NIO) by 29% to 4.3 million shares worth $38.95 million in the quarter and is the second most prominent shareholder of the company as of December 31, 2023.
7. Rivian Automotive, Inc. (NASDAQ:RIVN)
Average Analyst Price Target Upside: 66.58%
Number of Hedge Fund Holders: 32
Rivian Automotive, Inc. (NASDAQ:RIVN) is an American electric vehicle manufacturer. The company produces electric pick-up trucks, SUVs, and delivery vehicles. With a market cap of nearly $10.7 billion, it is one of the most valuable electric car companies in the world.
In the fourth quarter of 2023, the number of institutional investors with stakes in Rivian Automotive, Inc. (NASDAQ:RIVN) declined slightly to 32 from 35 in the third quarter. However, the stake value increased to $1.132 billion in Q4 from $867.069 million in the preceding quarter. D E Shaw has increased its stake by 246% in Q4 to 16.846 million shares worth $395.21 million and is the biggest shareholder of the company as of December 31, 2023. Additionally, John Overdeck And David Siegel’s Two Sigma Advisors has increased its position in the company by a whopping 4221% to 11.885 million shares worth $278.838 million in the quarter.
Over the last three months, 24 Wall Street analysts have covered Rivian Automotive, Inc. (NASDAQ:RIVN), and 13 analysts maintain a Buy-equivalent rating on the stock. It is the 7th best EV stock to buy for the long term, as the average analyst price target of $18.24 represents a 66.58% change from the current levels on March 28.
Baron Funds mentioned Rivian Automotive, Inc. (NASDAQ:RIVN) in its third quarter 2023 investor letter. Here is what it said:
“Shares of Rivian Automotive, Inc., a U.S.-based electric vehicle manufacturer, continued their volatile trading, and after declining during the first half of 2023, rose 45.7% during the third quarter. Rivian’s unit economics are improving as a result of several factors: i) the company’s production rate is increasing, which enables it to better absorb fixed costs; ii) Rivian is ramping up the usage of more price effective technologies, such as LFP batteries and its in-house developed motor, Enduro; and iii) the company is benefiting from renegotiated supplier agreements, as its scale and purchasing power have significantly increased over the last few years. Management expects continued progress in profitability ahead as Rivian further scales production. We remain shareholders and believe that the release of Rivian’s new smaller SUV dubbed R2, which is planned for early 2024, would enable the company to compete in the higher volume SUV segment, and significantly expand its addressable market. On the liquidity front, we expect the company to raise additional funds to support its longer-term business plans.”
6. XPeng Inc. (NYSE:XPEV)
Average Analyst Price Target Upside: 70.31%
Number of Hedge Fund Holders: 15
XPeng Inc. (NYSE:XPEV) is a Chinese electric vehicle company with offices in the USA and Germany. The company’s products include compact and mid-size sedans, P5 and P7, mid-size SUVs, G6 and G9, and the multi-purpose vehicle X9.
13 Wall Street analysts have covered the stock in the last three months with an average price target of $13.08, and it shows a 70.31% upside from March 28 levels. Of those 13 analysts, 8 keep a Buy-equivalent rating on the company stock. On March 21, Bank of America analyst Ming-Hsun Lee gave a Buy rating to XPeng Inc.’s (NYSE:XPEV) stock with a $13.50 price target.
XPeng Inc. (NYSE:XPEV) released its Q4 earnings on March 19. The company reported a non-GAAP EPS of -$0.28, which outperformed the analyst estimates by $0.14. The company’s revenue surged 154% year-over-year to $1.84 billion and beat the estimates by $90 million.
As of the fourth quarter of 2023, 15 hedge funds have a stake in XPeng Inc. (NYSE:XPEV) at a combined value of $190.853 million. D E Shaw takes the top spot among the institutional investors of the company with shares worth $75.73 million as of December 31, 2023.
XPeng Inc. (NYSE:XPEV) is one of the best EV stocks to buy for the long term. Other such stocks include Blink Charging Co. (NASDAQ:BLNK), Polestar Automotive Holding UK PLC (NASDAQ:PSNY), and VinFast Auto Ltd. (NASDAQ:VFS).
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Disclosure. None. 11 Best EV Stocks To Buy For The Long Term is originally published on Insider Monkey.