In this article, we discuss 11 small-cap EV stocks to invest in along with the latest updates around the EV industry.
The electric vehicle (EV) industry was growing at a strong pace over the last few years. However, it’s facing some challenges that have slowed down the growth. It does not mean that the industry is at a halt. Over time, it is on track to take over the internal combustion engines entirely.
The transition to EVs is proving more difficult than anticipated, with consumer demand not matching expectations, partly due to a lack of charging infrastructure and the complexity of switching from long-established fuel technologies.
A CNBC report from September 10 states that European car manufacturers are facing a range of challenges in their shift toward EVs, which is leading several companies to rethink their timelines. Volvo recently abandoned its goal of selling only EVs by 2030. Instead of that, it is opting to remain flexible and include hybrid models in its lineup.
Other major automakers, such as Volkswagen, Ford, and Mercedes-Benz, have similarly delayed plans to phase out internal combustion engine vehicles due to market uncertainties, including slower infrastructure development and changing government incentives.
Despite these short-term setbacks, experts believe automakers will continue investing in EVs to remain relevant in the market.
The Competitive Edge of Chinese Electric Vehicle Makers
While the growth in the US and Europe is slowing down, China is picking up a significant pace and dominating the EV landscape. According to a World Economic Forum report, Chinese EVs are much cheaper than their Western counterparts, with an average price of $34,400, compared to $55,242 in the U.S. The price gap is driven by lower labor costs, favorable government subsidies, and more affordable battery sourcing.
Chinese automakers now produce more than half of the world’s EVs and are using their cost advantages to potentially dominate the global market. As Chinese brands gain scale and expertise, their competitive pricing could allow them to challenge Western automakers.
The Western EV Market Compared to China
While Tesla remains a strong competitor to China, other U.S. and European automakers have been slower to compete effectively due to high prices and limited EV options. However, the US government and the private sector are also trying their best to expand the industry and become a dominant force in the EV industry.
According to a Reuters report published on September 23, Monroe Capital LLC announced its intention to launch a new fund, the Drive Forward Fund LP, aimed at raising up to $1 billion to provide loans for smaller auto suppliers as the industry transitions from ICE vehicles to EVs.
The White House supports the intention and said that this fund will help small and medium-sized auto manufacturers to access affordable capital to refinance, grow, and diversify their operations and will benefit the over 250,000 employees in this sector.
The recent implementation of new U.S. tariffs on Chinese EVs, along with the need for compliance with strict emissions regulations, is pushing automakers to adapt their supply chains.
Monroe CEO Ted Koenig stated that the fund would be vital for stimulating growth and innovation in the automotive supply chain. Many small and medium suppliers currently struggle to secure financing, which limits their ability to move toward EV part production.
Apart from that, we also discussed DOE’s move to boost EV operations in the US in our article about the 8 Best EV Stocks to Buy According to Short Sellers. Here is an excerpt from the article:
“…the U.S. Department of Energy (DOE) said on July 11 that the Biden administration, through the DOE, announced $1.7 billion in grants aimed at converting 11 at-risk auto manufacturing facilities across eight states to produce electric vehicles (EVs) and their components.
This move is part of President Biden’s broader “Investing in America” initiative, which seeks to revive manufacturing communities and protect union jobs. The grants are designed to keep the U.S. auto industry competitive, especially as global rivals invest heavily in EVs. The program, funded by the Inflation Reduction Act, will help retain over 15,000 union jobs and create nearly 3,000 new positions across the selected facilities. These facilities will manufacture a wide range of EV-related products, from parts for electric motorcycles to batteries for heavy-duty trucks.”
Erin Keating of Cox Automotive is also bullish on the US EV industry as she pointed out in a CNBC Power Lunch interview that competitive lease deals are putting downward pressure on used EV prices. She sees it as a positive, as more leased vehicles will eventually enter the used market, and ensure a steady supply of affordable EVs.
Addressing concerns about EV infrastructure and range anxiety, Keating reassured consumers that used EV batteries are holding up well, with minimal degradation. As infrastructure improves, she expects consumer confidence and EV adoption to grow.
With that, we look at the 11 Small Cap EV stocks to Invest In.
11 Small Cap EV Stocks to Invest In
Our Methodology
For this article, we made a list of 20 small-cap companies that are involved in the EV industry, as of September 25. Our small cap threshold is between $1 billion to $10 billion. We narrowed our list to 11 stocks most widely held by institutional investors. The 11 small cap EV stocks to invest in are listed in ascending order of their hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
11 Small Cap EV Stocks to Invest In
11. ZEEKR Intelligent Technology Holding Limited (NYSE:ZK)
Number of Hedge Fund Holders: 11
ZEEKR Intelligent Technology Holding Limited (NYSE:ZK) is an emerging player in the electric vehicle market, specializing in premium electric cars. The company made its debut with the Zeekr 001 model in April 2021, which began deliveries in October of the same year.
The car rapidly gained popularity and the company delivered nearly 72,000 units of the 001 model across over 330 cities in China by 2022. It is one of the best EV stocks to invest in.
The company has formed strategic partnerships with several industry leaders to accelerate its innovation and growth. It has pursued partnerships with notable tech companies like Waymo and Mobileye to develop autonomous driving solutions in addition to bringing advanced capabilities to its vehicles.
ZEEKR (NYSE:ZK) is gaining significant momentum in the EV market as it delivered over 18,000 vehicles in August, up 46% year-over-year. As of September 1, the company has delivered 121,540 year-to-date, representing an 81% year-over-year growth.
In August, the company unveiled its latest vehicle, Zeekr 7x, which is a mid-size battery-electric crossover SUV. The vehicle received over 20,000 pre-orders in the first week after its launch on August 30.
In terms of performance, the single-motor variant of 7x delivers 310 kW (416 hp) and has a range of 605 km (376 miles), while the dual-motor version has a total output of up to 475 kW (637 hp) and accelerates from 0 to 60 mp/h in just 3.8 seconds. The vehicle is equipped with rapid charging capabilities, which allows the 75 kWh battery to charge from 10% to 80% in just 10.5 minutes.
Analysts are also quite bullish on ZEEKR (NYSE:ZK) as it has been covered by 7 analysts and all of them maintain a Buy-equivalent rating on the company stock. Their average price target of $33.35 represents an upside of nearly 82% from current levels, as of September 25.
In Q2, 11 hedge funds held positions worth $59.158 million in the company.
10. Polestar Automotive Holding UK PLC (NASDAQ:PSNY)
Number of Hedge Fund Holders: 12
One of the best EV stocks, Polestar Automotive Holding UK PLC (NASDAQ:PSNY) is a Swedish automotive manufacturer that produces electric vehicles. The company operates with an “asset-light” model, which means it does not own manufacturing facilities outright. Instead, it relies on production capabilities from Volvo and Geely facilities located in various countries, including China, the United States, and South Korea.
The company began as Flash Engineering, a Swedish motorsport team that participated in the Scandinavian Touring Car Championship. Over time, the team transitioned into car tuning and rebranded itself as Polestar Racing, and became an official partner of Volvo for performance modifications. In 2015, Volvo acquired Polestar and redefined it as a brand dedicated to electric vehicles.
Polestar Automotive (NASDAQ:PSNY) has several cars under its brand. The Polestar 1 was produced as a premium performance hybrid and only 1500 have been produced globally. The car was discontinued in 2022 and featured a hybrid powertrain consisting of a front-mounted petrol engine and two rear electric motors, which produced a combined output of 619 horsepower.
It has also won 8 automotive awards. The Polestar 2, Polestar 3, and Polestar 4 are completely electric offerings of the company. The first Polestar 4 SUV Coupe was delivered in August.
On August 14, the company announced the commencement of production for its luxury SUV, the Polestar 3, at a facility in South Carolina, making it the first model from the brand to be manufactured on two continents. The factory will supply vehicles for both the US and European markets. Most experts consider it a strategic move to avoid recent tariffs on vehicles made in China.
9. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 15
Plug Power Inc. (NASDAQ:PLUG) is a U.S. company specializing in hydrogen fuel cell systems that serve as alternatives to traditional batteries in electric-powered vehicles and equipment. It is building a complete green hydrogen system that includes production, storage, delivery, and energy generation. It takes its place among our best EV stocks to invest in.
Its GenDrive system combines fuel cells produced by the company and Ballard Power Systems with a hydrogen storage solution, enables quick recharge times of just minutes, unlike the hours required for lead-acid batteries. This technology allows hydrogen-powered forklifts to maintain steady power while fitting into spaces designed for conventional batteries.
The company has created a market for hydrogen fuel cell technology, deploying over 69,000 fuel cell systems and more than 250 fueling stations worldwide To support its goals, the company is working on a green hydrogen highway across North America and Europe.
Plug Power (NASDAQ:PLUG) has also built a new Gigafactory to produce electrolyzers and fuel cells, with plans for several hydrogen production plants to start operating by the end of 2028. It delivers its green hydrogen solutions directly to customers and through partnerships in many areas, including material handling, electric vehicles, power generation, and industrial uses.
At its latest earnings call, management mentioned its potential growth from strong revenue potential from its electrolyzer deployment. The company is on track to deploy an additional 100 megawatts of electrolyzers by the end of 2024, building on the successful commissioning of 55 megawatts in the second quarter, which is projected to contribute $70 million in revenue.
While immediate revenue recognition may be limited, the company has already collected cash for much of this. The company’s 7.5 gigawatts in basic design and engineering contracts could yield over $1.5 billion in revenue, which shows substantial market potential.
In the second quarter, Plug Power’s (NASDAQ:PLUG) shares were held by 15 hedge funds at a combined value of $10.78 million. As of June 30, Coatue Management holds 2.6 million company shares, worth $6.073 million and is the largest shareholder of the company.
8. Arcadium Lithium plc (NYSE:ALTM)
Number of Hedge Fund Holders: 19
Arcadium Lithium plc (NYSE:ALTM) is focused on the production of lithium chemicals products in the Asia Pacific, North America, Europe, the Middle East, Africa, and Latin America. Lithium is a critical component of EV batteries. The company is one of the best EV stocks to invest in.
The company excels in a variety of lithium extraction methods, including hard-rock mining and direct lithium extraction (DLE), which enables the creation of high-purity lithium products such as lithium hydroxide and lithium carbonate.
During the inaugural Investor Day on September 19, management shared ambitious plans for the future. They expect a 25% increase in combined lithium carbonate and lithium hydroxide volumes for 2024 and 2025.
The growth stems from completed expansion projects at the Fénix and Olaroz sites, which are currently operational and do not require additional capital investment. Beyond these immediate advancements, the company is focused on expanding its extensive portfolio of resources in a manner that aligns with market demands and customer needs.
Arcadium Lithium (NYSE:ALTM) outlined a two-wave expansion plan across its high-quality and cost-effective assets located in Argentina and Canada. The first wave, containing four existing projects at various stages of development, is set to be completed by 2028, with projections indicating a doubling of current sales volumes.
Following this, the second wave of initiatives, still in the development and planning phases, presents the opportunity to ramp up production capacity significantly, targeting an increase of between 125,000 and 295,000 metric tons of lithium carbonate equivalent (LCE) beyond 2028.
The company has a clear path toward achieving an anticipated $1.3 billion in Adjusted EBITDA by 2028, dependent on certain market conditions.
The forecast is supported by low-cost operations and multi-year customer agreements, which help maintain healthy profit margins. Furthermore, anticipated price increases in the lithium market could improve revenue and incentivize supply growth across the industry.
Since the merger of Allkem and Livent in January 2024, which formed Arcadium Lithium (NYSE:ALTM), the company has been proactive in implementing cost-reduction measures. With expected savings of up to $80 million in 2024, the company now expects nearing its initial target of $125 million in savings by the end of 2025, approximately two years ahead of schedule.
The efficiencies result from organizational restructuring, operational synergies, and a streamlined supply chain, which indicates the potential for even greater savings in the long term.
First Pacific Advisors stated the following regarding Arcadium Lithium plc (NYSE:ALTM) in its Q2 2024 investor letter:
“Arcadium Lithium plc (NYSE:ALTM) is an integrated, low-cost, well-managed lithium producer formed by the merger of Livent, which the Fund owned, and Allkem in Australia. The merger was completed at the beginning of the year and we received, and decided to hold, shares of Arcadium. The share price has declined because of volatile lithium prices that collapsed from bubbly levels at the beginning of 2023.27 Estimates for electric vehicle production are slowing and capacity got ahead of demand; the industry is now waiting for a supply response.
Arcadium is an unusual investment for us. We normally avoid the commodity and materials sectors, and have kept our position in Arcadium small. But we believe Arcadium has a unique position in an industry with a strong long-term outlook. The company has low-cost production assets, is virtually debt-free, and has considerable capacity additions planned near-term.”
7. Winnebago Industries, Inc. (NYSE:WGO)
Number of Hedge Fund Holders: 19
Winnebago Industries, Inc. (NYSE:WGO) is a prominent manufacturer in the North American outdoor lifestyle sector. It manufactures and produces a variety of products under renowned brands such as Winnebago, Grand Design, Chris-Craft, Newmar, and Barletta. The diverse portfolio caters to leisure travel and outdoor recreation. It ranks 7th on our list of best small cap EV stocks to invest in.
In January 2023, the company unveiled its first fully operational all-electric RV, the eRV2, at the Florida RV SuperShow in Tampa. The innovative vehicle features a zero-emission powertrain that operates both the driving and living systems on electricity. The eRV2 includes elements made from recyclable and biodegradable materials, further enhancing its appeal to eco-conscious consumers.
Additionally, the RV boasts a 900-watt solar capacity and a 48V battery system, providing over 15,000 usable watt-hours, which makes it an attractive option for those seeking sustainable travel solutions.
Chris-Craft, another subsidiary of Winnebago (NYSE:WGO), also made headlines in February 2023 by unveiling the Launch 25 GTe, a fully operational, zero-emission electric concept boat.
The vessel aims to replace traditional engine and fuel systems with an electric motor and battery bank, which is a significant step for Chris-Craft as it aims to electrify the luxury boating experience.
In May 2023, the company completed the acquisition of Lithionics Battery, a premier provider of lithium-ion battery solutions. The acquisition was done to significantly enhance the company’s ability to innovate within the battery technology space, advancing its overall electrical ecosystem.
Furthermore, in February 2024, Winnebago (NYSE:WGO) announced a partnership with Xos, Inc., a leading manufacturer of electric commercial vehicles. Together, they are developing a fully electric chassis tailored for Winnebago’s Specialty Vehicles division, which has a long-standing history of producing commercial vehicles.
The collaboration uses Xos’s established battery and electronics technology, which supports Winnebago’s commitment to zero-emission solutions in commercial applications.
Winnebago (NYSE:WGO) was held by 19 hedge funds in the second quarter and the stakes amounted to $110.883 million. Punch Card Capital is the top shareholder of the company and has a position worth $54.014 million as of Q2.
6. Sigma Lithium Corporation (NASDAQ:SGML)
Number of Hedge Fund Holders: 20
One of the best EV stocks, Sigma Lithium Corporation (NASDAQ:SGML) is establishing a significant presence in the lithium market, primarily through its operations in Brazil. The company controls several properties in Minas Gerais, covering approximately 185 square kilometers.
Despite challenges in the broader lithium market, it has shown impressive operational and financial resilience. In the second quarter, production ramped up to an impressive 22,000 tonnes every 30 to 35 days. The consistent output enabled the company to secure favorable credit terms related to exports, further improving its market position.
Management has laid out ambitious expansion plans, aiming to increase production capacity to 100,000 tonnes of lithium carbonate equivalent (LCE) by 2026. During Q2’s earnings call, they emphasized a disciplined growth strategy, which focuses on one production line at a time to ensure efficiency and quality.
The immediate goal is to produce approximately 80,000 tonnes of LCE, equivalent to 520,000 tonnes of lithium concentrate, by the end of next year. Once this target is reached, the company will initiate the construction of a third production line capable of producing 250,000 tonnes of LCE.
Moreover, on September 16, Sigma Lithium (NASDAQ:SGML) announced it remains on track to meet its third-quarter production target of 60,000 tonnes of Quintuple Zero Green Lithium, which points to its commitment to sustainability. Additionally, the company reported that it is shipping 22,000 tonnes of this green lithium to Mitsubishi, which is evidence of its ability to maintain a consistent operational pace with near-monthly shipments.
5. Enovix Corporation (NASDAQ:ENVX)
Number of Hedge Fund Holders: 22
Enovix Corporation (NASDAQ:ENVX) is engaged in designing, developing, and manufacturing lithium-ion batteries. Its 3D Silicon cell design utilizes a fully active silicon anode and is a significant advancement over traditional lithium-ion batteries.
As a result, the new batteries offer enhanced energy density and a longer lifespan, which makes them appealing for applications that require extended battery life and superior performance. The company takes its place among our best EV stocks.
In May, the company announced a significant development agreement with one of the world’s top five smartphone manufacturers by unit volume. The partnership has led to the manufacturing of EX-1M battery cells tailored to the specifications of the smartphone customer, with the first samples expected to be delivered in the second quarter of 2024.
High-volume production is set to take place at the company’s Fab2 facility located in Penang, Malaysia. It points to Enovix’s (NASDAQ:ENVX) capability to scale production efficiently and cater to the needs of major players in the smartphone industry.
Further reinforcing this positive outlook, TipRanks reported on September 13 that after an insightful meeting with CEO Raj Talluri, William Blair maintained an Outperform rating on the stock.
The analyst expressed enthusiasm about the rapid development of the company’s manufacturing capabilities, noting the sophistication of the equipment and the scale of operations observed during the grand opening of the facility in Malaysia. Moreover, Talluri hinted that a second smartphone manufacturer is nearing the finalization of a joint development agreement.
In the second quarter, 22 hedge funds had stakes in Enovix (NASDAQ:ENVX), with total positions worth $153.245 million. As of Q2, Electron Capital Partners is the most significant shareholder in the company with a stake worth $89.7 million.
Massif Capital Real Assets Strategy stated the following regarding Enovix Corporation (NASDAQ:ENVX) in its Q2 2024 investor letter:
“Enovix Corporation (NASDAQ:ENVX): Enovix is perhaps a bit of an outlier in our portfolio given that it is a battery manufacturer selling into consumer goods markets, but it fits nicely in what we believe to be the Massif Capital analytical sweet spot, businesses where science/technology, geopolitics/geoeconomics and energy/materials overlap. While some would argue that Enovix is inappropriate for a liquid real asset portfolio, the traditional definition of real asset businesses is dated.
Traditionally, real asset businesses are those that own and operate real estate, infrastructure, and natural resource assets. While this definition is workable, and most of the companies we invest in fall into one of these categories, it does not consider the ever-growing role of applied physical sciences in specific manufacturing fields, nor does it take into account the growing importance of material sciences and the changing nature of energy in general. Enovix is a material sciences business aiming to transform an ever-growing list of unique, highly refined materials into energy storage devices. They create value by understanding materials’ physical and electrochemical properties better than others…” (Click here to read the full text)
4. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Holders: 24
SolarEdge Technologies, Inc. (NASDAQ:SEDG) is making efforts to solidify its position in the EV landscape by building on its strong foundation in solar energy solutions. While the company is known primarily for its optimized inverter systems that significantly improve the efficiency of solar photovoltaic installations, it has expanded its offerings to include EV charging stations and battery storage systems.
The charging solutions are designed to work with solar energy systems, allowing users to recharge their electric vehicles using clean, renewable energy. The integration improves convenience for users and aligns with broader sustainability goals. It ranks 4th on our list of best EV stocks to invest in.
In addition to hardware, SolarEdge (NASDAQ:SEDG) provides comprehensive monitoring and management software for both solar setups and EV charging stations. The software allows users to optimize energy usage and keep track of system performance in real-time, which is increasingly valuable as energy efficiency becomes more crucial in today’s market.
In a significant move to advance its position in the EV sector, the company completed the acquisition of Wevo Energy Ltd. in April. It is a software startup that specializes in optimizing EV charging for locations with high volumes of chargers, such as apartment complexes and public charging stations.
Wevo’s solution has already been implemented across approximately 1,000 sites in Europe, Asia, and North America, facilitating over 215,000 charging sessions. The acquisition advances the company’s capabilities in EV charging management and positions it to tap into the rapidly growing demand for efficient charging solutions.
On September 19, Mizuho lowered the price target on SolarEdge (NASDAQ:SEDG) to $35 from $40 and kept an Outperform rating. Despite the adjustments, the outlook for the company remains positive.
Mizuho noted that the company’s revenue growth and anticipated margin recovery following a period of channel destocking should provide solid support for the stock. The firm believes that its revenue targets may be conservative, with expectations of positive free cash flow by the second quarter of 2025. Concerns about inventory levels have also been described as exaggerated, suggesting that the market may be overlooking the underlying strengths of the business.
3. Harley-Davidson, Inc. (NYSE:HOG)
Number of Hedge Fund Holders: 29
One of the best EV stocks, Harley-Davidson, Inc. (NYSE:HOG) is a storied manufacturer of motorcycles based in Wisconsin. It has operations across Harley-Davidson Motor Company, LiveWire, and Harley-Davidson Financial Services.
The decision to spin off its electric motorcycle division, LiveWire, through a merger with AEA-Bridges Impact has positioned it as the first publicly traded electric motorcycle company in the United States. While LiveWire is a publicly traded company on its own, Harley-Davidson, Inc. (NYSE:HOG) owns a controlling interest in the company.
The move emphasizes the company’s dedication to the electric vehicle sector while allowing the core motorcycle business to thrive independently as LiveWire focuses on capturing the growing demand for electric motorcycles.
Under the LiveWire brand, the company has introduced a series of electric motorcycles, including the flagship LiveWire ONE. Equipped with a 15.5 kWh battery, the model offers an impressive range of approximately 104 miles on a full charge, which is a significant innovation for the company.
In March, the company expanded its electric offerings with the launch of the LiveWire S2 Mulholland, which shows its focus on diversifying its product line to meet varying consumer needs in the electric segment.
At a stake value of $594.413 million, 29 hedge funds held positions in Harley-Davidson (NYSE:HOG) in the second quarter. As of June 30, H Partners Management is the top shareholder in the company and has a position worth $389.064 million.
In addition to advancements in product development, it announced a strong share repurchase program in July, with plans to buy back $1 billion of its outstanding common stock by 2026.
The new initiative will utilize cash flow from operations and replace existing repurchase plans, building on the $875 million already spent on share buybacks since 2022. Such actions underline its intent to return value to shareholders while enhancing the stock’s appeal.
On September 24, Harley-Davidson (NYSE:HOG) announced a cash dividend of $0.1725 per share for the third quarter, payable by September 27 to shareholders on record as of September 16. As of September 25, the stock’s dividend yield is 1.81%.
Artisan Partners stated the following regarding Harley-Davidson, Inc. (NYSE:HOG) in its Q2 2024 investor letter:
“The biggest detractors from performance during the quarter were Harley-Davidson, Inc. (NYSE:HOG), Henry Schein and Expedia. Harley’s share price declined 23% during the quarter after a strong run in Q1. We had significantly reduced our position at higher share prices over the past 12–18 months. The shares have been weak over concerns that higher interest rates are impacting affordability and retail sales. We share these concerns. Harley is likely to reduce its forecasts for the year when it reports, though this now appears to be discounted in the valuation. Famous last words. The shares now trade at a single-digit multiple of earnings. We believe the brand is strong, and management is able to adjust production and costs to meet various demand environments. If interest rates begin to decline as anticipated, demand should improve.”
2. EnerSys (NYSE:ENS)
Number of Hedge Fund Holders: 30
EnerSys (NYSE:ENS) is strategically expanding its portfolio to meet the growing demand for EV batteries and advanced energy storage solutions. The company focuses on battery technologies, including both lithium-ion and lead-acid batteries, which are essential for the operation of electric vehicles. It is among our best EV stocks to invest in.
It produces high-performance batteries specifically designed for the needs of EVs, which offer reliable energy storage. The NexSys iON batteries cater to industrial applications, including electric forklifts and heavy-duty electric vehicles, further highlighting the versatility of its offerings.
In addition to battery production, EnerSys (NYSE:ENS) provides advanced battery management systems that improve both performance and longevity for EV applications. The systems incorporate monitoring and diagnostic tools, which optimize battery usage and maintenance.
A recent announcement on September 20 made by the company outlined that it has been selected to enter negotiations for a substantial $199 million award from the U.S. Department of Energy’s Office of Manufacturing and Energy Supply Chains.
The funding is part of a broader initiative under the $62 billion Bipartisan Infrastructure Law, aimed at advancing the domestic battery materials processing and manufacturing industry.
The company plans to invest around $615 million to build and commission a lithium-ion cell production facility in Greenville, South Carolina, over the next four years. Additionally, a further $50 million will be allocated to develop a specialized production line for the U.S. Department of Defense.
The development of this new facility is set to be significant, with plans for a 500,000-square-foot state-of-the-art manufacturing plant. The operation aims to produce a range of lithium-ion cells tailored for commercial, industrial, and defense applications, beginning with an initial production capacity of five-gigawatt hours (GWh) per year.
With federal, state, and local funding combined with incentives from the Inflation Reduction Act, EnerSys (NYSE:ENS) is well-positioned to meet the capital requirements for the gigafactory. The investments in infrastructure and technology, alongside the increasing demand for EVs, present a promising outlook for the company.
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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