In this article, we will explore the 11 small-cap EV stocks to invest in.
An Overview of the Global Electric Vehicle Market
The global electric vehicle (EV) market continues to expand, driven by the need for sustainable transportation and advancements in technology.
According to the International Energy Agency (IEA), nearly 14 million electric cars were sold worldwide in 2023, marking a 35% increase from the previous year, with 95% of these sales occurring in China, Europe, and the United States. This surge brought the total number of electric vehicles on the road to 40 million. Electric cars represented about 18% of all car sales in 2023, up from 14% in 2022 and just 2% in 2018. The growth is primarily driven by battery electric vehicles, which made up 70% of the electric car stock in 2023. The electric vehicle market is expected to expand rapidly as consumer demand for cleaner transportation grows.
Electric car sales are expected to rise to about 17 million in 2024, which would be an increase of over 20% compared to 2023. Electric vehicles could make up more than 20% of all car sales in 2024. This forecast is supported by current trends, government policies, and the usual seasonal patterns seen in EV sales.
China remains the largest market for electric vehicles, accounting for nearly 60% of new electric car registrations in 2023. Europe follows with approximately 25%, and the United States accounts for around 10%.
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There is significant potential for growth in emerging markets, where EV adoption is taking off. We could soon see a shift from early adopters to mass-market consumers. The introduction of new models and innovations, such as improved battery technologies and charging solutions, will play a crucial role in this transition.
Additionally, government policies and incentives continue to support the transition to electric mobility, further fueling demand. To compete with China in the EV market, the US is focusing on localizing its EV supply chain and increasing production capacity. Reuters reported on October 22 that US Energy Secretary Jennifer Granholm announced that the Department of Energy is quickly working to finalize $1.7 billion in grants aimed at converting automotive plants for electric vehicle production. This funding will help automakers change their existing facilities to make electric vehicles and their components.
With continued advancements, investments, and increasing acceptance among consumers, the future looks promising for the electric vehicles market. Having discussed some of the current trends in the EV market, let’s now take a look at the 11 small-cap EV stocks to invest in.
A modern electric vehicle charging at an electric car station.
Methodology
To compile our list of the 11 best small-cap EV stocks to invest in, we reviewed our own rankings and consulted various online resources to compile a list of the best small-cap EV stocks. Please note that we defined small-cap stocks as those with a market capitalization between $500 million and $10 billion.
From an initial pool of more than 20 small-cap EV stocks that met our criteria, we focused on the top 11 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 11 best small-cap EV stocks to invest in are ranked in ascending order based on the number of hedge funds holding stakes in them.
Why do we care about what hedge funds do? 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. Lotus Technology Inc. (NASDAQ:LOT)
Market Capitalization: $2.39 Billion
Number of Hedge Fund Holders: 8
Lotus Technology Inc. (NASDAQ:LOT) is a company that designs, develops, and sells luxury electric vehicles under the iconic British brand Lotus. The company is well known for its battery-electric vehicles, including SUVs and sedans, with a strong focus on next-generation automobility technologies such as electrification and digitalization. Lotus Technology Inc. (NASDAQ:LOT) ranks among the best small-cap EV stocks to buy.
In the first nine months of 2024, the company delivered over 7,600 vehicles, achieving a remarkable 136% increase from the previous year. For the first nine months of 2024, Lotus Technology Inc.’s (NASDAQ:LOT) total revenue reached $653 million, reflecting a 105% year-over-year growth. This strong performance showcases Lotus’s rising popularity in the competitive EV market.
In the third quarter of 2024, Lotus Technology Inc. (NASDAQ:LOT) expanded its global reach by starting deliveries of the Emira in South Africa and India, and the Eletre in Japan, South Korea, and the Philippines. The high-performance Eletre Carbon, designed for North America, was unveiled and is set to begin deliveries in the first half of 2025. Bespoke and collection versions of both the Eletre SUV and Emeya sedan were introduced, further diversifying the product lineup.
Lotus Technology Inc. (NASDAQ:LOT) is also innovating with its Hyper Hybrid EV technology, which features a groundbreaking 900V system and dual hypercharging capabilities. This technology not only enhances performance but also offers a combined range of over 1,100 kilometers, aligning with consumer demand for long-range electric vehicles. Overall, Lotus Technology Inc. (NASDAQ:LOT) is well-positioned for future growth with its impressive sales figures, innovative technologies, and expansion into new markets. These factors make it an attractive investment opportunity in the EV sector.
10. ZEEKR Intelligent Technology Holding Limited (NYSE:ZK)
Market Capitalization: $6.76 Billion
Number of Hedge Fund Holders: 9
ZEEKR Intelligent Technology Holding Limited (NYSE:ZK) is a prominent Chinese electric vehicle (EV) manufacturer by Geely Automobile Holdings. The company focuses on creating premium electric cars and has developed its own technologies for batteries, electric motors, and vehicle supply chains. ZEEKR Intelligent Technology Holding Limited (NYSE:ZK) ranks among the best EV stocks to buy.
In the third quarter of 2024, the company achieved impressive results, delivering 55,003 vehicles, marking a 51% increase compared to the same period last year. Their total revenue reached RMB 18.36 billion, which is a 30.7% rise from Q3 2023. Vehicle sales alone contributed RMB 14.40 billion, reflecting a 42% growth year-over-year. These achievements demonstrate ZEEKR Intelligent Technology Holding Limited’s (NYSE:ZK) robust demand and effective market strategies.
October 2024 saw further success with the delivery of 25,049 vehicles, a remarkable 92% increase from October 2023. This momentum is supported by the launch of new models, such as the ZEEKR 7X, a premium electric five-seater SUV designed for families. The ZEEKR 7X was launched in September 2024. Within just 50 days of its launch, over 20,000 units were delivered, showcasing its appeal in a competitive market.
Additionally, ZEEKR Intelligent Technology Holding Limited (NYSE:ZK) introduced the ZEEKR MIX on October 23, 2024. This family-oriented vehicle features innovative design elements that maximize interior space and enhance user experience. Such moves highlight ZEEKR Intelligent Technology Holding Limited’s (NYSE:ZK) commitment to delivering high-quality products tailored to consumer needs. With its strong sales growth, innovative model launches, and focus on premium electric mobility, ZEEKR Intelligent Technology Holding Limited (NYSE:ZK) represents a compelling investment opportunity in the EV sector.
