13 Most Promising EV Stocks to Buy According to Hedge Funds

5. Cummins Inc. (NYSE:CMI)

Number of Hedge Fund Holders: 38

Cummins Inc. (NYSE:CMI) is a power solution company headquartered in Indiana. The company operates through five segments that include Components, Engine, Distribution, Power Systems, and Accelera by Cummins.

The company offers a wide range of products, including diesel, natural gas, electric, and hybrid powertrains, in addition to powertrain components. It serves markets in North America, Europe, and Asia and provides important components for battery electric vehicles. These include batteries, hydrogen fuel cells, e-axles, traction drives, and electrolyzers, which are essential for the growing demand for clean energy solutions.

In May, Accelera by Cummins, the zero-emissions division of Cummins (NYSE:CMI), unveiled several new clean energy products at the 2024 Advanced Clean Transportation Expo. The innovations included upgraded hydrogen fuel cell engines (FCE300 and FCE150), a more efficient 14Xe eAxle, and the adaptable BP104E battery platform.

The fuel cells offer higher power density and durability, while the 14Xe eAxle increases torque and energy efficiency. The BP104E battery, using advanced lithium iron phosphate technology, offers superior performance and flexibility. These next-gen products are designed to accelerate the transition to zero-emissions transportation.

In July, the company announced a $150 million investment to advance battery electric vehicle component manufacturing at its Columbus Engine Plant in Indiana. The project, funded by a $75 million federal grant as part of the Inflation Reduction Act, will transform 360,000 square feet of manufacturing space to produce zero-emissions components and electric powertrains for Accelera.

The investment is expected to create approximately 250 jobs and is projected to reduce greenhouse gas emissions by 104 million metric tons of carbon dioxide by 2030.

On October 2, TipRanks reported that Morgan Stanley analyst Angel Castillo maintained a Buy rating for Cummins (NYSE:CMI) with a $341 price target. The analyst’s positive outlook is based on the company’s strong position in the backup power systems market, especially its service to major tech companies like Microsoft, Amazon, and Meta.

The company effectively combines generator manufacturing with installation and service, which shows solid pricing power and revenue growth. It ranks at 5 on our list of most promising EV stocks to buy.

Parnassus Investments stated the following regarding Cummins Inc. (NYSE:CMI) in its first quarter 2024 investor letter:

“Cummins Inc. (NYSE:CMI), a leader in diesel and alternative fuel engines and generators, guided to a shallower-than-expected downcycle in 2024. New rules from the Environmental Protection Agency are expected to drive higher demand for the company’s truck engines in the coming years.”