11 Small Cap EV Stocks to Invest In

1. BorgWarner Inc. (NYSE:BWA)

Number of Hedge Fund Holders: 41

BorgWarner Inc. (NYSE:BWA) is making significant strides in the automotive supply sector as it shifts focus toward the growing EV market. It has a comprehensive range of products tailored for EVs, including electric motors, emissions systems, inverters, on-board chargers, and battery heaters.

It is moving forward with its “Charging Forward” initiative, which is aimed at expanding its EV and hybrid offerings. Management has set an ambitious target of achieving $10 billion in annual eProduct sales by 2027, which is a sign of their confidence in capturing a substantial portion of this growing market.

In addition to their focus on electrification, BorgWarner (NYSE:BWA) recently secured a significant agreement to supply turbochargers for the General Motors Corvette ZR1. The partnership points to the company’s engineering prowess, as these turbochargers are set to be the largest twin turbochargers available for passenger vehicles.

With features such as a 76mm forged milled compressor wheel and a 67mm turbine wheel designed for maximum efficiency, the company’s reputation for quality, built through years of collaboration with NTT INDYCAR SERIES, has clearly resonated with major automotive manufacturers.

The company is on a positive trajectory financially. BorgWarner (NYSE:BWA) reported a remarkable increase in free cash flow, rising to $297 million in the second quarter, up from just $30 million a year earlier. It positions the company favorably for the future and supports its guidance of achieving between $475 million and $575 million in free cash flow for the full year. In the second quarter, 41 hedge funds held positions in BorgWarner (NYSE:BWA), worth $725.485 million. As of Q2, Harris Associates is the most dominant shareholder in the company and has a position worth $342.493 million. It tops our list of best EV stocks.

While we acknowledge the potential of BorgWarner Inc. (NYSE:BWA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BWA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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