12 Best EV Stocks To Buy For 2023

Published on March 9, 2023 at 9:02 am by Ramish Cheema in Hedge Funds, News

In this piece, we will take a look at the 12 best electric vehicle stocks to buy for 2023. For more stocks, head on over to 5 Best EV Stocks To Buy For 2023.

The electric vehicle industry has significantly grown in less than a decade since even in the early 2010s, there were few companies – whether established giants or startups – that could successfully mass produce electric cars. However, now, internal combustion car manufacturers such as Ford Motor Company (NYSE:F) are acutely aware that if they do not speed up their electric vehicle production, then pretty soon, they will end up losing market share to firms such as Tesla, Inc. (NASDAQ:TSLA) which are selling thousands of electric cars every month. In fact, even the stock market is fully aware of the massive potential of electric vehicles, as Tesla’s market capitalization, which sat at $570 billion at the close of market on March 9, 2023, is more than double the value of Ford and General Motors Company (NYSE:GM) combined. This is a stunning fact that represents the reality of today’s market, especially since General Motors and Ford are iconic American firms that are giants in their own right and have manufactured cars for decades.

Boom in the electric vehicle industry is also aided by government spending, particularly in the Western world and in China. The U.S. government passed the Inflation Reduction Act (IRA) last year which promised an eye popping $370 billion in subsidies for renewable energy and climate investments. Specifically for the electric vehicles segment, the IRA promises up to $7,500 in tax credits for electric vehicles that are manufactured in America, and it also boosts companies’ incentives to make more electric cars in the U.S. by requiring that 100% of all battery components must be made in North America by 2028 as well as mandating that 80% of all critical materials used in battery manufacturing must either be extracted in North America or in countries with free trade agreements with the U.S. Since the U.S. is one of the biggest car markets in the world, this opens the door to domestic firms and those with U.S. based operations to have a solid footing in the country.

However, Fisher Investments, one of the largest hedge funds in the world, was quick to caution that just because Congress passes laws favoring a certain industry does not mean that the relevant firms’ shares will perform well. Citing some previous examples, the hedge fund pointed out:

Even the presumption that there are surefire winners from the IRA seems overstated to us. It stems from the basic assumption that government support will bring big success for the relevant companies and industries, vaulting them past competitors (presuming future Congresses don’t redirect the money, which is scheduled to drip out over a decade). But we are old enough to remember the story of Solyndra, a Bay Area solar company backed by the Obama administration over a decade ago. It was supposedly the future, but it went belly up, leaving taxpayers on the hook. An electric vehicle battery plant that received federal funds in 2010 charted a similar course, going from fanfare to furloughs and floundering within two years. Not to point fingers at the Obama administration—pretty much every presidential administration in modern history has made similar foibles. But it is a good reminder that governments don’t always pick winners.

While governments might not pick out the winners, hedge funds bet substantive amounts of capital on potential stock market outperformers. Within the electric vehicle market, some of these are Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), and Tesla, Inc. (NASDAQ:TSLA).

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Our Methodology

We used Insider Monkey’s database of 943 hedge funds covering their Q4 2022 investments to determine which electric vehicle companies – pureplay or otherwise – are their favorites. The top twelve are listed below.

Best EV Stocks To Buy For 2023

12. Polestar Automotive Holding UK PLC (NASDAQ:PSNY)

Number of Hedge Fund Investors in Q4 2022: 12

Polestar Automotive Holding UK PLC (NASDAQ:PSNY) is a Swedish electric car manufacturer headquartered in Gothenburg. The firm is owned by the Swedish auto giant Volvo.

Polestar Automotive Holding UK PLC (NASDAQ:PSNY) manufactures electric performance cars, with its first vehicle, the Polestar 1, being a hybrid vehicle. These days, the firm makes and sells the Polestar 2, which is a fully electric vehicle. 12 of the 943 hedge funds polled by Insider Monkey had owned Polestar Automotive Holding UK PLC (NASDAQ:PSNY)’s shares in Q4 2022.

Polestar Automotive Holding UK PLC (NASDAQ:PSNY) meets Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and General Motors Company (NYSE:GM) as a favorite hedge fund EV stock.

11. Faraday Future Intelligent Electric Inc. (NASDAQ:FFIE)

Number of Hedge Fund Investors in Q4 2022: 14

Faraday Future Intelligent Electric Inc. (NASDAQ:FFIE) is an American company headquartered in Gardena, California. The firm has several electric vehicle designs as well as plans to build them.

Faraday Future Intelligent Electric Inc. (NASDAQ:FFIE) announced in March 2023 that it will begin the highly anticipated production of its FF 91 electric vehicle by the end of this month if investor funds come through. By the end of 2022’s final quarter, 14 of the 943 hedge funds polled by Insider Monkey had bought the firm’s shares.

Faraday Future Intelligent Electric Inc. (NASDAQ:FFIE)’s largest hedge fund shareholder is Jim Simons’ Renaissance Technologies which owns 3.6 million shares that are worth $1 million.

10. The Shyft Group, Inc. (NASDAQ:SHYF)

Number of Hedge Fund Investors in Q4 2022: 16

The Shyft Group, Inc. (NASDAQ:SHYF) is an American firm headquartered in Novi, Michigan. It makes and sells commercial vehicles as well as chassis and truck bodies.

The Shyft Group, Inc. (NASDAQ:SHYF) is targeting the highly lucrative commercial last mile electric van delivery market, as it announced in March 2023 that its Class 3, 4 and 5 Blue Arc delivery vans have been certified by the Environmental Protection Agency (EPA). Insider Monkey dug through 943 hedge fund portfolios for their December quarter of 2022 investments and found out that 16 had held a stake in the firm.

The Shyft Group, Inc. (NASDAQ:SHYF)’s largest investor in our database is Richard Driehaus’ Driehaus Capital which owns 1 million shares that are worth $24 million.

9. Lucid Group, Inc. (NASDAQ:LCID)

Number of Hedge Fund Investors in Q4 2022: 17

Lucid Group, Inc. (NASDAQ:LCID) is an American electric vehicle manufacturer headquartered in Newark, California. The firm makes and sells luxury electric cars.

Lucid Group, Inc. (NASDAQ:LCID)’s Lucid Air electric vehicle has a driving range of 520 miles, which is the longest for any vehicle certified by the EPA. 2022 was a good year for the Air, as the firm delivered 4,369 cars compared to the 125 deliveries made in 2021. Insider Monkey’s fourth quarter of 2022 survey of 943 hedge funds revealed that 17 had bought the firm’s shares.

8. XPeng Inc. (NYSE:XPEV)

Number of Hedge Fund Investors in Q4 2022: 17

XPeng Inc. (NYSE:XPEV) is a Chinese electric vehicle manufacturer headquartered in Guangzhou. The firm makes and sells sport utility vehicles (SUVs), sports sedans, and family sedans.

XPeng Inc. (NYSE:XPEV) is slated to benefit from China’s anticipated economic recovery this year, particularly since its deliveries in February grew by 15% month over month. By the end of Q4 2022, 17 of the 943 hedge funds polled by Insider Monkey had invested in the firm.

Jim Simons’ Renaissance Technologies is XPeng Inc. (NYSE:XPEV)’s largest hedge fund investor. It owns 7.2 million shares that are worth $72 million.

7. NIO Inc. (NYSE:NIO)

Number of Hedge Fund Investors in Q4 2022: 25

NIO Inc. (NYSE:NIO) is another Chinese electric car manufacturer. The firm makes and sells both SUVs and sedans. Additionally, it also offers vehicle inspection services and energy products to its customers.

NIO Inc. (NYSE:NIO) is currently facing the heat from a weak Chinese economy as the firm’s revenue estimates for the first quarter of $1.6 billion was almost a billion dollar shy of Wall Street estimates of $2.5 billion. For the same quarter, it expects to deliver as many as 33,000 vehicles. The firm’s latest earnings report also saw its shares downgraded by JPMorgan in March 2023, as the bank reduced its share price target to $10 from $14 and pointed out that the firm’s fourth quarter of 2022 saw its margins contract due to inflation, and that not only can the first quarter of 2023 be worse but that an expected recovery in the Q2 can potentially be weak.

Insider Monkey’s December quarter of 2022 survey covering 843 hedge funds revealed that 25 had bought NIO Inc. (NYSE:NIO)’s shares.

Out of these, Jim Simons’ Renaissance Technologies is NIO Inc. (NYSE:NIO)’s largest shareholder. It owns 10.8 million shares that are worth $105 million.

6. Li Auto Inc. (NASDAQ:LI)

Number of Hedge Fund Investors in Q4 2022: 25

Li Auto Inc. (NASDAQ:LI) is a Chinese electric vehicle manufacturer headquartered in Beijing. The firm’s only electric vehicle is the Li ONE – an SUV with six seats.

Li Auto Inc. (NASDAQ:LI) scored a win in Q4 2022 when Canada’s largest pension fund bought a $10 million stake in the company. Alongside the fund, 25 of the 943 hedge funds part of Insider Monkey’s Q4 2022 research had also held a stake in the firm.

Li Auto Inc. (NASDAQ:LI)’s largest investor in our database is Jim Simons’ Renaissance Technologies which owns 10 million shares that are worth $207 million.

Ford Motor Company (NYSE:F), Li Auto Inc. (NASDAQ:LI), General Motors Company (NYSE:GM), and Tesla, Inc. (NASDAQ:TSLA) are some top EV stocks that hedge funds are piling into.

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