5 Best EV Startups to Watch

2. WM Motor

WM Motor is an auto manufacturer that makes battery-operated electric vehicles. It is based in China and has so far raised close to $5 billion in funding over six rounds, with the latest round held in February. The lead investors in the startup include Shanghai Pudong Development Bank and SAIC Motor, among others. The company has plans to debut on the stock market soon, and has set eyes on the Star Market in Shanghai for the purpose. In April, media reports indicated that some application problems related to the IPO had led to WM Motor pulling out.

Just like WM Motor, another EV maker with explosive growth potential is NIO Inc. (NYSE: NIO), the auto manufacturer based in Shanghai that is called the ‘Tesla of China’ due to the scale of its operations in the country. On June 1, investment advisory Citi upgraded NIO Inc. (NYSE: NIO) stock to Buy from Neutral with a price target of $58.30.

At the end of the first quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in NIO Inc. (NYSE: NIO), down from 34 in the preceding quarter worth $2.6 billion.

In its Q2 2020 investor letter, McLain Capital, an asset management firm, highlighted a few stocks and NIO Inc. (NYSE: NIO) was one of them. Here is what the fund said:

“Nio, Inc. (NIO): It’s stock up 360% since the beginning of June on no news, and one of our more troublesome short positions, the Chinese electric vehicle manufacturer is valued at a whopping $17bln on trailing revenue of only $1.1bln. In 2019, the business ran a -17% gross margin, a -140% EBITDA margin & burned ~$1.5bln in cash in 2019. The stock has become one of the most popular stocks among retail traders with approximately 250,000 accounts holding the name just on the popular Robinhood trading platform.”