In this article, we will be looking at the 12 best EV stocks to invest in. To skip our detailed analysis on the EV industry, its history, current status, and future outlook, you can go ahead to the 5 Best EV Stocks to Invest In.
In 2008, when Tesla, Inc. (NASDAQ: TSLA) released its first car, perhaps no one had fully realized how popular electric vehicles (EVs) would become just over a decade later. The market for EVs has managed to become one that has seen exponential growth in the past couple of years and will foreseeably grow even more in the years to come. For instance, in 2019, EV sales crossed the 2.1 million mark globally, which surpassed the sales in 2018, according to the International Energy Agency. Keeping up with this consistent trend, it is foreseen by Markets and Markets that the market size of EVs will still continue to grow from 4,093 thousand units this year to 34,756 thousand units by 2030, representing a CAGR of 26.8%.
Perhaps one of the major reasons for the sudden and continued popularity of EVs rests in the fact that traditional cars, and the fuel they consume, are incredibly harmful to the environment. According to the US Environmental Protection Agency’s Green Vehicle Guide, normal cars tend to emit roughly 4.6 metric tons of carbon dioxide in a year. The figure is, of course, dependent on the car type, the fuel it consumes, fuel economy, and mileage. However, the basic idea remains the same: traditional cars emit a range of greenhouse gases that are woefully harmful to the environment by contributing to growing temperatures and global warming. Apart from just carbon dioxide, normal cars also emit methane and nitrous oxide from the tailpipe and hydrofluorocarbon emissions from air conditioners. All these gases also have a higher global warming potential (GWP) than carbon dioxide.
In contrast, your typical EV tends to be a blessing for the environment. According to the Office of Energy Efficiency and Renewable Energy, EVs have the potential to reduce the emissions of harmful greenhouse gases, and broaden the scope of fuel choices available to US citizens, while ensuring the country does not become vulnerable to price hikes and disruptions in the supply of petroleum. The first claim is possible since the electricity needed to charge an EV can, and very often does, come from renewable sources, like solar or wind, and EVs are already not burning typical car fuel so they greatly reduce the emission of harmful gases. The second claim is possible since nearly all electricity in the US is produced domestically, and so, the reliance on international providers for petroleum would be bound to fall with the growing use of EVs. The need for EVs leading to the growth of the EV market size has resulted in companies like Tesla, Inc. (NASDAQ: TSLA), General Motors Company (NYSE: GM), ChargePoint Holdings, Inc. (NYSE: CHPT), and Fisker Inc. (NYSE: FSR) becoming more profitable. Today, these companies are considered some of the best EV stocks to invest in, and will also be discussed in detail in this article.
Keeping in mind the present and future profitability of the EV industry, coupled with the benefits it presents, not only to the environment but to governments as well, various countries have begun implementing measures to aid the growth of this industry. International goals to reduce vehicle emissions by 2050 and measures promoting the sale of EVs and related infrastructure have gained prominence. For instance, Vermont’s Low Emission Vehicle program along with its subsidiary Zero Emission Vehicle program, are two examples of government initiatives to support the EV industry. The Zero Emission Vehicle program has been adopted by 12 states apart from Vermont so far, including California, New York, and Washington, and is responsible for the commercialization of hybrid EVs in the US. It’s not just Vermont or even the US, though, as countries like Germany, Norway, and others in Europe are not only promoting EV sales and investing in the industry but are also offering subsidies to incentivize the growth of EV sales in Europe.
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The above claims stand to make the case that EVs are becoming increasingly popular across the globe, and the EV industry is becoming ever profitable as a result. With that context in mind, we have compiled a list of the best EV stocks to invest in. The stocks mentioned in this article were selected on the basis of hedge fund popularity and past and potential growth measured by gains in the past 6 months and year to date.
Just like the traditional car industry, the hedge fund industry is also feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let’s look at the 12 best EV stocks to invest in.
Best EV Stocks to Invest In
12. Lordstown Motors Corp. (NASDAQ: RIDE)
Number of Hedge Fund Holders: 12
Lordstown Motors Corp. (NASDAQ: RIDE) is a manufacturer of light-duty fleet vehicles. The company can still be considered a start-up in the industry as it was founded in 2019. It sells Endurance, a full-size electric pickup truck, and ranks 12th on our list of the best EV stocks to invest in since it is considered as one of the most promising stocks with future potential.
On June 15th, Lordstown Motors Corp. (NASDAQ: RIDE) announced that it had the necessary funds for vehicle production until May 2022, and has also secured binding orders. The company was also reported to be looking for strategic partners to raise more funds on June 21st. Lordstown Motors Corp. (NASDAQ: RIDE) began getting a positive response the next day, with Morgan Stanley commenting that the company is trying to win back investor confidence. Analyst Adam Jonas noted the company’s plant and its potential for expansion alongside its assets and the fact that it seems to be on track to start production in September.
Lordstown Motors Corp. (NASDAQ: RIDE) announced -$0.72 in EPS for the first quarter of 2021, versus estimates of -$0.28. By the end of the first quarter of 2021, 12 hedge funds out of the 866 tracked by Insider Monkey held stakes in this company. The total value of their stakes was about $27.2 million. Comparatively, in the previous quarter 17 hedge funds held stakes in the company worth roughly $99.4 million. Like Tesla, Inc. (NASDAQ: TSLA), General Motors Company (NYSE: GM), ChargePoint Holdings, Inc. (NYSE: CHPT), and Fisker Inc. (NYSE: FSR), Lordstown Motors Corp. (NASDAQ: RIDE) is one of the best EV stocks to invest in.
11. Canoo Inc. (NASDAQ: GOEV)
Number of Hedge Fund Holders: 16
Canoo Inc. (NASDAQ: GOEV) is a mobility technology company focused on the manufacture of EVs for commercial and consumer use in the US. The company also provides B2B delivery vehicles and lifestyle vehicles incorporating skateboard architecture technology. It ranks 11th on our list of the best EV stocks to invest in.
On June 17th, Canoo Inc. (NASDAQ: GOEV) made an announcement stating that VDL Nedcar would be its contract manufacturing partner, and will manufacture Lifestyle Vehicles for the US and EU markets. In the meanwhile, Canoo Inc. (NASDAQ: GOEV) would be focused on its US-based micro-factory. Nedcar will be responsible for building 1000 units for the two markets in 2022, with an eventual goal of 15,000 units by 2023, and Canoo Inc. (NASDAQ: GOEV) has commented that this would aid the company in meeting its goal of producing and delivering EVs by the fourth quarter of 2022. The company’s first-quarter 2021 results showcased an EPS of -$0.43 versus -$0.23 in estimates.
By the end of the first quarter of 2021, 16 hedge funds out of the 866 tracked by Insider Monkey held stakes in this company. The total value of their stakes was about $14.8 million. Comparatively, in the previous quarter 17 hedge funds held stakes in the company worth roughly $96.6 million. Like Tesla, Inc. (NASDAQ: TSLA), General Motors Company (NYSE: GM), ChargePoint Holdings, Inc. (NYSE: CHPT), and Fisker Inc. (NYSE: FSR), Canoo Inc. (NASDAQ: GOEV) is one of the best EV stocks to invest in.
10. Geely Automobile Holdings Limited (OTCMKTS: GELYF)
Number of Hedge Fund Holders: N/A
Geely Automobile Holdings Limited (OTCMKTS: GELYF) is an investment holding company that also operates as a vehicle manufacturer in China. The company sells sedans, wagons, and EVs, among other vehicles, and also offers vehicle design, tech consulting, logistics, packing, and storage services. It ranks 10th on our list of the best EV stocks to invest in.
On June 10th it was announced that Happiness Biotech’s subsidiary, Taochejun (Fujian) Automobile Distribution, signed a distribution agreement with Geely Automobile Holdings Limited’s (OTCMKTS: GELYF) subsidiary, Zhejiang Fengsheng Automobile Sales Co. The agreement seeks to sell EVs under the Maple brand, with a sales target of 200 vehicles for the end of this year. It has also launched the Zeekr brand of EVs this April, investing $300 million in the project. Geely Automobile Holdings Limited’s (OTCMKTS: GELYF) gross profit margin for the trailing 12 months is 16%, and it has gained 2.94% in the past 6 months.
Like Tesla, Inc. (NASDAQ: TSLA), General Motors Company (NYSE: GM), ChargePoint Holdings, Inc. (NYSE: CHPT), and Fisker Inc. (NYSE: FSR), Geely Automobile Holdings Limited (OTCMKTS: GELYF) is one of the best EV stocks to invest in.
9. Fisker Inc. (NYSE: FSR)
Number of Hedge Fund Holders: 22
Fisker Inc. (NYSE: FSR) is a manufacturer and designer of EVs. The company was founded in 2016 and has headquarters in Manhattan Beach, California. It is ranked 9th on our list of the best EV stocks to invest in.
On June 17th, Fisker Inc. (NYSE: FSR) entered into a binding manufacturing agreement with Magna International Inc. (NYSE: MGA). Fisker Inc.’s (NYSE: FSR) Fisker Ocean is also due to debut at the LA Auto Show this November, entering the market at an MSRP of $37,499, with both Fisker Inc. (NYSE: FSR) and Magna International Inc. (NYSE: MGA) promising that the electric Fisker Ocean SUV will begin to be produced by November 17th, 2022, at the latter’s facility in Austria. Fisker Inc. (NYSE: FSR) is also planning on producing a climate-neutral vehicle by 2027. Earlier this month, RBC Capital Markets also began covering the stock and gave it an Outperform rating alongside a $27 price target.
In the first quarter of 2021, Fisker Inc. (NYSE: FSR) had an adjusted EPS of -$0.63 versus estimates of -$0.17 and revenue valued at $22,000. The company also has a gross profit margin of 22.73% and has gained 11.01% in the past 6 months and 16.19% year to date.
By the end of the first quarter of 2021, 22 hedge funds out of the 866 tracked by Insider Monkey held stakes in this company. The total value of their stakes was about $337 million. Comparatively, in the previous quarter 18 hedge funds held stakes in the company worth roughly $146 million.
8. Lucid Motors (NYSE: CCIV)
Number of Hedge Fund Holders: 22
Lucid Motors (NYSE: CCIV) is a US-based EV manufacturer based in Newark, California. The company also operates in energy storage and original equipment manufacturing. In February 2021, it merged with the SPAC Churchill Capital Corp IV (NYSE: CCIV) to be publicly traded, in an $11.75 billion deal. It ranks 8th on our list of the best EV stocks to invest in.
By the end of the first quarter of 2021, 22 hedge funds out of the 866 tracked by Insider Monkey held stakes in this company. The total value of their stakes was about $531 million. Comparatively, in the previous quarter 57 hedge funds held stakes in the company worth roughly $981 million. Like Tesla, Inc. (NASDAQ: TSLA), General Motors Company (NYSE: GM), ChargePoint Holdings, Inc. (NYSE: CHPT), and Fisker Inc. (NYSE: FSR), Lucid Motors (NYSE: CCIV) is one of the best EV stocks to invest in.
7. ChargePoint Holdings, Inc. (NYSE: CHPT)
Number of Hedge Fund Holders: 24
ChargePoint Holdings, Inc. (NYSE: CHPT) is a provider of EV charging networks and solutions in the US. While the company is not an EV manufacturer itself, it is one that is necessary for the EV industry to continue operating. It offers hardware, software, and services for its consumer base and ranks 7th on our list of the best EV stocks to invest in.
This June, ChargePoint Holdings, Inc. (NYSE: CHPT) announced a new partnership with Mercedes-Benz (OTCPK: DDAIF), causing the stock to gain. Through this partnership, drivers holding Mercedes me Charge accounts will be able to charge their cars in a large collection of places in North America, including 60,000 spots to charge on the ChargePoint network and other EV charging networks.
As announced on the 3rd of June, ChargePoint Holdings, Inc. (NYSE: CHPT) had an adjusted EPS of -$0.18 for the latest quarter. The company’s revenue was valued at $40.51 million, beating estimates by $3.28 million and representing a 5.47% growth year over year. The company also has a gross profit margin of 22.31%. By the end of the first quarter of 2021, 24 hedge funds out of the 866 tracked by Insider Monkey held stakes in this company. The total value of their stakes was about $207 million.
Alger, an investment management firm, mentioned ChargePoint Holdings, Inc. (NYSE: CHPT) in their first quarter 2021 investor letter. Here’s what they said:
“ChargePoint Holdings, Inc. was among the top detractors from performance. ChargePoint provides a network of electric vehicle (EV) charging stations globally. Like equities of many businesses geared to electric vehicles, ChargePoint shares underperformed in the first quarter of 2021 as part of a broad rotation away from high-growth technology companies with limited track records of performance as public companies. Longer term, Charge Point could potentially serve as a bellwether company of the fast growing EV category and we believe it is an attractive way to gain exposure to EV adoption without betting on whether a particular EV brand will win in the marketplace. Additionally, EVs are a massive end market.”
6. NIO Inc. (NASDAQ: NIO)
Number of Hedge Fund Holders: 28
NIO Inc. (NASDAQ: NIO) is a designer and manufacturer of smart electric vehicles in China, Hong Kong, the US, the UK, and Germany. The company also provides energy and service packages to consumers and ranks 6th on our list of the best EV stocks to invest in.
On June 11th, NIO Inc. (NASDAQ: NIO) announced that it had received European Whole Vehicle Type Approval for its ES8 model. This approval means the company can now enter into the European market and mass-produce and sell its vehicles. Earlier, on June 1st, the stock was upgraded to Buy by Citigroup, in light of rising orders received by the company. The price target was raised to $58.3. For the first quarter of 2021, NIO Inc. (NASDAQ: NIO) had an adjusted EPS of -$0.49 versus estimates of -$0.15, and revenue valued at $1.22 billion, representing a 202.26% growth year over year.
By the end of the first quarter of 2021, 28 hedge funds out of the 866 tracked by Insider Monkey held stakes in this company. The total value of their stakes was about $1.32 billion. Comparatively, in the previous quarter 34 hedge funds held stakes in the company worth roughly $2.63 billion. Like Tesla, Inc. (NASDAQ: TSLA), General Motors Company (NYSE: GM), ChargePoint Holdings, Inc. (NYSE: CHPT), and Fisker Inc. (NYSE: FSR), NIO Inc. (NASDAQ: NIO) is one of the best EV stocks to invest in.
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Disclosure: None. 12 Best EV Stocks to Invest In is originally published on Insider Monkey.
