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.
9. Plug Power Inc. (NASDAQ:PLUG)
Market Capitalization: $2.10 Billion
Number of Hedge Fund Holders: 10
Plug Power Inc. (NASDAQ:PLUG) is an American company focused on developing hydrogen fuel cell systems, which serve as alternatives to traditional batteries in electric-powered vehicles and equipment. The company produces electrolyzers and fuel cells that serve various applications like material handling, e-mobility, and power generation. Hydrogen fuel cells improve runtime and charging efficiency, allowing hydrogen-powered engines to extend their range and carry more payload compared to other electric vehicle power solutions. Plug Power Inc. (NASDAQ:PLUG) ranks among the best EV stocks to buy.
In May 2024, the company secured a conditional commitment for a $1.66 billion loan guarantee from the Department of Energy (DOE) to finance the development of up to six green hydrogen production facilities. This funding will enable Plug Power Inc. (NASDAQ:PLUG) to supply major companies with locally produced green hydrogen, further solidifying its market position. Additionally, in the third quarter of 2024, the company received a $10 million grant from the DOE to develop advanced hydrogen refueling stations in Washington State, enhancing its infrastructure for medium and heavy-duty vehicles.
Plug Power’s (NASDAQ:PLUG) existing facilities in Georgia and Tennessee are critical to its operations, with a new plant in Louisiana set to become fully operational in early 2025. The company aims to significantly increase production capacity to meet rising customer demand efficiently. Plug Power Inc. (NASDAQ:PLUG) is focused on improving its hydrogen fuel margins as it effectively utilizes its network of hydrogen plants. Although maintenance at its facilities in Georgia and Tennessee limited margin contributions in the third quarter of 2024, higher utilization is expected to enhance margins in the fourth quarter. With its innovative approach and focus on expanding production capabilities, Plug Power Inc. (NASDAQ:PLUG) is well-positioned to take advantage of the shift toward sustainable energy solutions and grow in the evolving electric vehicle market.
8. Polestar Automotive Holding UK PLC (NASDAQ:PSNY)
Market Capitalization: $1.98 Billion
Number of Hedge Fund Holders: 11
Polestar Automotive Holding UK PLC (NASDAQ:PSNY) is a Swedish electric vehicle manufacturer that offers a range of electric cars in 27 markets across North America, Europe, and Asia Pacific. The company plans to expand into more markets in 2025, which will enhance its global presence. Polestar Automotive Holding UK PLC (NASDAQ:PSNY) offers three electric vehicle models: the Polestar 2, a performance fastback; the Polestar 3, an SUV; and the Polestar 4, a coupé SUV. The company plans to expand its lineup to five models by 2026, introducing the Polestar 5, a four-door GT, and the Polestar 6, an electric roadster. This ambitious line-up positions Polestar as a competitive player in the growing EV market.
On October 30, 2024, the company announced that its customers will now have access to 17,800 Tesla Superchargers in North America. This move significantly enhances charging options for its customers and complements its existing access to over 850,000 charging points in Europe. Polestar Automotive Holding UK PLC (NASDAQ:PSNY) is focused on improving the overall customer experience and making EV ownership more convenient.
On December 5, 2024, Polestar Automotive Holding UK PLC (NASDAQ:PSNY) began US production of the Long Range Single Motor variant of its flagship SUV, the Polestar 3, in South Carolina. By producing this model locally, Polestar Automotive Holding UK PLC (NASDAQ:PSNY) can better serve North American customers and increase market penetration.
In the third quarter of 2024, Polestar Automotive Holding UK PLC (NASDAQ:PSNY) delivered approximately 11,900 cars, bringing total deliveries for the year to 32,300. Polestar Automotive Holding’s (NASDAQ:PSNY) strategic plans for expansion and its position in the electric vehicle market make it an attractive option for investors looking for growth in the EV sector.
7. ChargePoint Holdings Inc. (NYSE:CHPT)
Market Capitalization: $504.27 Million
Number of Hedge Fund Holders: 12
ChargePoint Holdings Inc. (NYSE:CHPT) is a leading American company in the electric vehicle (EV) infrastructure sector. The company operates one of the largest networks of EV charging stations in North America and Europe. ChargePoint Holdings Inc. (NYSE:CHPT) operates with a capital-light business model, allowing it to grow alongside the increasing demand for EVs.
On December 16, ChargePoint Holdings Inc. (NYSE:CHPT) and the Colorado Energy Office announced the completion of six fast-charging corridors in Colorado. In total, 33 DC fast charging sites with over 80 charging ports are now available along highways across Colorado. This project was supported by $10 million in state funding and contributions from private and local government partners, demonstrating ChargePoint Holdings Inc.’s (NYSE:CHPT) strong community ties and commitment to enhancing EV accessibility.
Additionally, on December 18, 2024, the company announced a partnership with General Motors to install hundreds of ultra-fast charging ports across the US. This initiative aims to enhance access to charging stations and improve the overall EV driving experience, with plans for public availability by the end of 2025. Such collaborations position ChargePoint Holdings Inc. (NYSE:CHPT) as a key player in expanding EV infrastructure.
In October 2024, ChargePoint Holdings Inc. (NYSE:CHPT) introduced the CPF50, an affordable Level 2 charging solution priced at $699. This product lowers the entry barriers for fleet electrification while providing access to advanced fleet management software. Such innovations are essential for businesses looking to transition to electric fleets efficiently. Moreover, ChargePoint Holdings Inc. (NYSE:CHPT) launched the ChargePoint Essential cloud plan, which offers small businesses and multi-family housing access to its software platform at a competitive price. This plan allows station owners to earn revenue from charging fees, making it financially attractive.
CHPT is one of the best small-cap EV stocks to invest in. With its extensive and growing network and ongoing innovations, ChargePoint Holdings Inc. (NYSE:CHPT) is well-positioned for growth as demand for EV infrastructure rises.
6. Enovix Corporation (NASDAQ:ENVX)
Market Capitalization: $1.51 Billion
Number of Hedge Fund Holders: 14
Enovix Corporation (NASDAQ:ENVX) is an innovative American company that specializes in designing and manufacturing lithium-ion batteries with advanced silicon anodes. These batteries cater to a wide range of applications, including wearables, smartphones, laptops, industrial devices, and electric vehicles (EVs).
In July 2024, Enovix Corporation (NASDAQ:ENVX) signed a non-binding Memorandum of Understanding (MOU) with a global automotive OEM to scale its battery technology for the EV market. This partnership focuses on optimizing cell design and performance, which highlights the potential of Enovix Corporation’s (NASDAQ:ENVX) unique battery architecture. The innovative cell structure allows for faster charging and improved thermal management, making it suitable for high-performance applications.
In Q4 2024, the company expects to achieve a significant milestone with one of the major automakers in the EV sector. Enovix Corporation’s (NASDAQ:ENVX) strategy involves developing customized products in collaboration with leading automotive manufacturers, which positions it well for future growth in the expanding EV market. Enovix Corporation (NASDAQ:ENVX) plans to grow and strengthen its partnerships in 2025 by using a capital-efficient licensing model in the electric vehicle market that supports the long-term growth of its technology. The company’s innovative battery technology and strategic business approach position it well for future growth in a rapidly expanding market.
5. Sigma Lithium Corporation (NASDAQ:SGML)
Market Capitalization: $1.23 Billion
Number of Hedge Fund Holders: 16
Sigma Lithium Corporation (NASDAQ:SGML) is a leading Canadian company focused on producing lithium for electric vehicle batteries. It operates at the forefront of sustainability, with its Grota do Cirilo operation in Brazil producing Quintuple Zero Green Lithium. This innovative lithium is created with zero carbon emissions, no potable water, no toxic chemicals, and no tailings dams.
In Q3 2024, Sigma Lithium Corporation (NASDAQ:SGML) produced 60,237 tonnes of Quintuple Zero Green Lithium Concentrate, exceeding its target of 60,000 tonnes. Sales volumes also increased by 9% quarter-on-quarter, totaling 57,483 tonnes. The company also maintains one of the lowest cash operating costs in the industry.
On September 24, 2024, Sigma Lithium Corporation (NASDAQ:SGML) held its Investor Day, celebrating its first year of production and outlining plans to achieve an industrial capacity of approximately 125,000 tonnes per year of lithium carbonate equivalent (LCE) by 2026. This expansion includes two new industrial lines expected to start production in 2025 and 2026, which will significantly enhance output and efficiency. Sigma Lithium Corporation (NASDAQ:SGML) has also demonstrated commitment to strong financial management by projecting an adjusted cash EBITDA of $155 million by 2025 and nearly $700 million by 2027. This growth strategy is based on maximizing economies of scale, subsidized financing, and maintaining its commitment to carbon neutrality.
SGML is one of the best EV stocks to buy. The company’s focus on sustainable practices and its robust growth plan makes it an attractive investment opportunity in the electric vehicle sector. With increasing demand for lithium and a solid operational foundation, Sigma Lithium Corporation (NASDAQ:SGML) is poised for continued growth.
4. Lucid Group Inc. (NASDAQ:LCID)
Market Capitalization: $7.92 Billion
Number of Hedge Fund Holders: 19
Lucid Group Inc. (NASDAQ:LCID) is an American company focused on electric vehicles and advanced powertrain systems. The Company manufactures luxury electric cars and its flagship model, the Lucid Air, is recognized for its exceptional performance and efficiency. LCID ranks among the best EV stocks to buy.
In the third quarter of 2024, Lucid Group Inc. (NASDAQ:LCID) produced 1,805 vehicles and delivered 2,781 vehicles, reflecting a remarkable 90.9% increase in vehicles delivered compared to the same period last year. The company is on track to meet an annual production of around 9,000 vehicles in 2024. This growth in deliveries demonstrates strong demand for Lucid Group Inc.’s (NASDAQ:LCID) innovative electric vehicles.
In November 2024, the company opened orders for its highly anticipated Lucid Gravity SUV, which is set to begin production later this year. In October 2024, Lucid Group Inc. (NASDAQ:LCID) completed a capital raise of approximately $1.75 billion in October 2024. This funding enhances its financial stability and extends its runway into 2026, allowing the company to invest in production capabilities and technology advancements.
Lucid Group Inc. (NASDAQ:LCID) is also focused on optimizing costs at its state-of-the-art factory in Arizona, which is being designed for high efficiency. The factory will begin production of the Lucid Gravity SUV. It will initially produce 10,000 vehicles annually, with plans to expand capacity significantly in the future. The transition of key manufacturing processes to this facility is expected to reduce logistics costs and improve overall efficiency. With strong delivery growth, new product launches, and solid financial backing, Lucid Group Inc. (NASDAQ:LCID) presents a compelling investment opportunity in the electric vehicle market.
3. NIO Inc. (NYSE:NIO)
Market Capitalization: $9.32 Billion
Number of Hedge Fund Holders: 20
NIO Inc. (NYSE:NIO) is a leading electric vehicle manufacturer based in Shanghai, China. The company focuses on designing and producing smart electric vehicles, offering premium models under the NIO brand and family-oriented options through the ONVO brand. NIO Inc. (NYSE:NIO) ranks among the best EV stocks to invest in.
In the third quarter of 2024, NIO Inc. (NYSE:NIO) achieved a quarterly record with 61,855 vehicle deliveries, marking an 11.6% increase compared to the same period last year. The NIO brand alone accounted for 61,023 deliveries, maintaining its status as the top-selling brand in China’s battery electric vehicle (BEV) segment priced above RMB 300,000, with a market share of 48%. The ONVO brand also made its debut by delivering its first model, the L60, on September 28, targeting the mainstream family market.
NIO Inc.’s (NYSE:NIO) financial performance is improving as well. The vehicle margin rose to 13.1% in Q3 2024, up from 11% in Q3 2023, reflecting better component costs and operational efficiencies. This trend indicates that NIO Inc. (NYSE:NIO) is not only increasing its sales but also enhancing profitability.
Looking ahead, NIO’s flagship model, the ET9, is set to begin production in March 2025. This vehicle is expected to reinforce NIO’s premium image and attract more customers. With plans to introduce new models and a focus on profitability, NIO Inc. (NYSE:NIO) is positioning itself for sustained growth. On the other hand, the ONVO L60 has gained popularity among families due to its spacious design and low energy consumption. This aligns with NIO Inc.’s (NYSE:NIO) strategy to diversify its offerings and capture a broader market share. The company’s strong market presence and innovative approach make it a promising stock for investors looking to benefit from the growing EV market.
2. BorgWarner Inc. (NYSE:BWA)
Market Capitalization: $6.88 Billion
Number of Hedge Fund Holders: 27
BorgWarner Inc. (NYSE:BWA) is a key player in the automotive and e-mobility sectors, providing essential components for internal combustion, hybrid, and electric vehicles. The company is strategically expanding its presence in the electric vehicle (EV) market with innovative technologies. BorgWarner Inc. (NYSE:BWA) has secured three significant contracts for its High Voltage Coolant Heater (HVCH) technology in major Asian markets.
In China, a top automaker selected BorgWarner’s (NYSE:BWA) HVCH for a fully electric SUV, with production starting in Q2 2025. This partnership highlights the company’s commitment to tapping into China’s booming EV industry. In Korea, BorgWarner’s (NYSE:BWA) HVCH will be integrated into an electric pickup truck, with production expected to begin in March 2025. This technology will enhance cabin comfort and energy efficiency, crucial for improving the overall driving experience. Similarly, in Japan, BorgWarner’s (NYSE:BWA) HVCH will be used in a battery-electric vehicle starting production in 2028, marking the company’s entry into the Japanese market.
BorgWarner Inc. (NYSE:BWA) is also focused on innovation, recently showcasing advancements at the IAA Transportation 2024 event in September. These innovations include Lithium Iron Phosphate (LFP) battery packs designed for commercial vehicles and a new DC fast-charging station that supports rapid charging needs and commercial EV fleet applications.
These strategic wins and innovations are expected to support the company’s long-term profitable growth. This positions BorgWarner Inc. (NYSE:BWA) as a strong contender in the EV market. BWA is one of the best EV stocks to buy.
1. EnerSys (NYSE:ENS)
Market Capitalization: $3.68 Billion
Number of Hedge Fund Holders: 30
EnerSys (NYSE:ENS) is a leader in stored energy solutions for various markets and industrial applications. It produces batteries and energy storage solutions for electric vehicles (EVs). The company operates through four main divisions: Energy Systems, Motive Power, Specialty, and New Ventures. These sectors allow EnerSys to cater to various industries, including telecommunications, defense, and electric vehicles (EVs). Motive Power batteries and chargers are used in industrial electric-powered vehicles. Through its New Ventures division, EnerSys (NYSE:ENS) provides energy storage and management systems for various applications including utility backup power and dynamic fast charging for electric vehicles.
In September 2024, the company announced that it had been selected for a $199M Department of Energy award negotiation to partially fund EnerSys’ (NYSE:ENS) planned lithium-ion cell production facility in Greenville, South Carolina. The investment aligns with the federal Bipartisan Infrastructure Law, which seeks to enhance domestic battery manufacturing capabilities. EnerSys (NYSE:ENS) plans to invest around $615 million over four years in this facility, which is expected to create approximately 500 jobs and produce five-gigawatt hours (GWh) of lithium-ion cells annually. The plan includes developing a state-of-the-art manufacturing facility that will cover 500,000 square feet. This gigafactory will produce lithium-ion cells for a variety of products in all its business areas, including fast charging systems, NexSys iON batteries for electric forklifts, Alpha XRT-Li power systems for communication networks, and future high-energy Li6T batteries for military vehicles.
Previously, in July 2024, EnerSys (NYSE:ENS) completed its acquisition of Bren-Tronics to further strengthen its portfolio in the military and defense sectors. This acquisition enhances its capabilities in lithium product offerings, which are critical for both commercial and defense applications. With its comprehensive approach to energy storage and management, along with significant investments and strategic moves, EnerSys (NYSE:ENS) is well-positioned for growth.
Overall, ENS ranks first among the 11 small-cap EV stocks to invest in. While we acknowledge the potential of EV companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ENS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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