In this article, we discuss the 8 best EV penny stocks to invest in now along with the latest updates around the EV industry.
According to an S&P Global report on October 21, the automotive industry faces challenges in sustaining EV sales after initial adoption by early technology enthusiasts. Analysts indicate that higher EV prices, typically $10,000 to $15,000 more than comparable internal combustion engine (ICE) models, have hindered broader consumer purchases.
While some automakers have recently lowered prices, demand remains closely tied to subsidies. The report highlighted that demand often declines in markets where subsidies and incentives decrease. In the U.S., states like New Jersey continue to offer incentives, such as up to $4,000 for new battery EVs and $250 for EV chargers, to help close the price gap.
Another challenge is that range anxiety persists, especially in colder weather, which can reduce battery efficiency by about 25% when temperatures drop below 40°F, according to Consumer Reports. Additional challenges include insufficient charging infrastructure, longer charging times compared to refueling ICE vehicles, and high repair costs for components like battery packs, which can increase insurance premiums.
Nevertheless, experts believe that EVs are eventually going to take over the ICE market, as mentioned in our 13 Most Promising EV Stocks to Buy According to Hedge Funds. Here is an excerpt from the article:
“In a CNBC interview, Young Liu, Chairman of Hon Hai Technology Group said that the future of the automotive industry will be dominated by electric vehicles, with hybrids playing a limited role due to advancements in battery technology. He made a note of current challenges such as charging times and range anxiety, but expects improvements in battery systems will eliminate the need for hybrids.”
Read Also: 7 Best Delivery Stocks To Invest In Now and 10 High Growth Non-Tech Stocks That Are Profitable in 2024.
Adapting to Change: The Future of Electric Mobility
At the Fortune Most Powerful Women Summit, GM CEO Mary Barra highlighted the competitive pressure from China’s growing EV market. She noted significant changes in China as the country embraces hybrids and EVs, with over a hundred local companies offering low-cost options, creating a challenging pricing environment.
Nevertheless, Barra told Fortune that she remains optimistic about the U.S. EV future and noted that improvements in affordability and charging infrastructure will encourage more consumers to adopt EVs. Her company’s collaboration with Tesla to expand charging access and partnerships with travel centers have positioned the company as the second-best-selling EV maker in the U.S., with a 60% increase in EV deliveries in the last quarter. Barra emphasized the need for attractive, affordable vehicles and ongoing enhancements to charging networks to drive future growth.
With that, we look at the 8 Best EV Penny Stocks to Invest in Now.
8 Best EV Penny Stocks to Invest in Now
Our Methodology
For this article, we identified over 30 companies with operations in the EV industry that are trading below $5 as of October 22. We narrowed our list to 8 stocks most widely held by institutional investors. We skipped the stocks that were trading either below $1 or had major headwinds in sight. The best EV penny stocks are listed in ascending order of their hedge funds sentiment, taken from Insider Monkey’s database of 912 hedge funds.
Why are we interested in the stocks that hedge funds pile into? 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).
8 Best EV Penny Stocks to Invest in Now
8. Zapp Electric Vehicles Group Limited (NASDAQ:ZAPP)
Number of Hedge Fund Holders: 7
Share Price: $2.74
Zapp Electric Vehicles Group Limited (NASDAQ:ZAPP) is focused on creating innovative electric personal urban mobility solutions. Its first product, the i300, is a high-performance urban electric motorcycle that offers traditional motorcycle capabilities in an easy-to-use step-through design. According to the company, the i300 will be the first of several high-performance electric two-wheelers that it intends to launch.
The company’s growth strategy relies on a partnership with Summit, a major automotive manufacturer in Southeast Asia, which enables it to scale production capacity to 300,000 units by 2026 with minimal capital expenditure. The innovative exoskeleton design of the i300 simplifies manufacturing and allows for assembly with fewer than 200 components and completing production in about 30 minutes.
On October 8, The Fly reported that Maxim initiated coverage of Zapp (NASDAQ:ZAPP) with a Buy rating and a price target of $7. The company has secured contract manufacturing deals for its new electric motorcycle in India and Thailand and received regulatory approvals to sell in the U.K. and Thailand.
Its first electric urban motorcycle sales are anticipated in the second half of FY24, with a significant increase expected in FY25 and FY26. The analyst also highlighted Zapp’s (NASDAQ:ZAPP) innovative features, which focus on performance, reliability, and safety, suggesting these will attract buyers in countries where noisy, polluting gas-powered motorcycles are common.
7. Hyliion Holdings Corp. (NYSE:HYLN)
Number of Hedge Fund Holders: 7
Share Price: $2.64
Hyliion Holdings Corp. (NYSE:HYLN) specializes in designing and developing power generators for both stationary and mobile applications. The company is focused on innovative solutions that facilitate clean and flexible electricity production. In September 2022, Hyliion acquired hydrogen and fuel-agnostic generator technology from General Electric, known as the KARNO generator.
The KARNO generator presents a viable solution for vehicle charging, and offers flexibility in fuel sources, including hydrogen, along with lower emissions and noise compared to traditional internal combustion generators. It can adjust power output without efficiency losses by managing individual generators and controlling heat input.
KARNO generators are designed for scalability and ease of installation that facilitate the quick establishment of EV charging sites and improve energy supply. Their fuel-agnostic capability, along with superior emissions performance and efficiency, makes them suitable for both urban and remote locations using existing fuel infrastructure.
With electrical efficiency reaching up to 50% and requiring minimal maintenance, KARNO generators provide reliable and cost-effective power generation. They can connect directly to DC chargers, reducing conversion losses and improving efficiency.
On October 9, Hyliion (NYSE:HYLN) signed a non-binding Letter of Intent with ANA Inc. to deploy up to six KARNO generators for mobile power generation. The initial rollout will include one 200kW unit in 2025, with plans for five additional units based on successful testing.
6. VinFast Auto Ltd. (NASDAQ:VFS)
Number of Hedge Fund Holders: 8
Share Price: $4.23
One of the best EV penny stocks, VinFast Auto Ltd. (NASDAQ:VFS) has made significant progress in the electric mobility sector, focusing on the design and production of EVs, e-scooters, and e-buses. The company offers a diverse lineup, including models such as the VF 5, VF 6, VF 7, VF 8, VF 9, and VF e34, catering to a range of consumer needs from A-SUVs to E-SUVs.
In the first half of 2024, the company delivered 21,747 vehicles, showing a remarkable 92% increase compared to the same period in 2023. The company aims to achieve approximately 80,000 EV deliveries by the end of the year, significantly up from the 34,855 vehicles delivered in 2023.
On October 22, VinFast (NASDAQ:VFS) announced that it delivered 21,912 EVs in the third quarter of 2024, representing a 66% increase from the previous quarter and a 116% increase year-over-year.
September was a strong month for the company, with over 9,300 EVs delivered in Vietnam as it achieved the highest monthly deliveries for the company in the domestic market. The milestone marks the first time a Vietnamese EV brand has surpassed all international competitors to become the market leader in Vietnam’s automotive industry.
VinFast (NASDAQ:VFS) is actively expanding its global presence, especially in Indonesia, where it has signed agreements with five dealership partners and opened its first store in April.
By late summer, the company launched 15 additional dealer stores in the region. It is also establishing itself in Thailand with partnerships involving 15 initial dealers and has secured dealership agreements in the Middle East, including Oman and Qatar, where a showroom in Doha is set to open in the third quarter of 2024.
We also covered the stock in our September 12 article about the best EV stocks to buy for the long term, and VinFast (NASDAQ:VFS) shares have gained nearly 7% since it was posted. The company takes the 6th spot on our list of best EV penny stocks.
5. Lotus Technology Inc. (NASDAQ:LOT)
Number of Hedge Fund Holders: 11
Share Price: $4.45
Lotus Technology Inc. (NASDAQ:LOT) designs and sells electric lifestyle vehicles globally, including including high-performance sports cars under the Lotus brand. A division of the prestigious British Lotus Group, the company has capitalized on its rich history of innovation and performance to make a strong impact in the EV market. It is one of the best EV penny stocks.
The Lotus Evija, introduced in 2019, marked the company’s first all-electric hypercar, featuring a 70 kWh battery developed in partnership with Williams Advanced Engineering. This model represented a significant milestone in the company’s transition to electric mobility.
In 2023, Lotus (NASDAQ:LOT) expanded its EV lineup with the launch of the Eletre, an electric SUV with a 600 km range, and the Emeya, a luxury hyper-GT that accelerates from 0 to 100 km/h in 2.8 seconds. These models highlight the company’s push into sustainable mobility while preserving its high-performance legacy.
In the first nine months of 2024, Lotus (NASDAQ:LOT) reported delivering 7,543 vehicles, representing a $134% year-over-year growth. Deliveries were evenly distributed across Europe, China, North America, and other regions, each contributing 20-35%. In Q3 2024, the Emeya was delivered in Europe, while the Eletre reached markets like the GCC, Japan, and Korea. In September, the company introduced the Eletre Carbon, a high-performance SUV for North America, with deliveries expected in 2025.
Bespoke and collection versions of both the Eletre and Emeya also began deliveries in Q3. Additionally, the company also unveiled its innovative Theory 1 concept car, showing advanced technology and sustainable design.
Lotus Group’s Vice President of Design, Ben Payne said about Theory 1:
“With Theory 1, we’ve built on everything Lotus has achieved so far in its 76-year history, to push the boundaries for what it means to drive a performance vehicle. We want to demonstrate that you don’t need to compromise – with both digital and analogue capabilities working harmoniously in the future car. In doing this, we are able to bring drivers the best possible immersive driving experience with raw emotion, functionality and connectivity, at the core.”
4. Polestar Automotive Holding UK PLC (NASDAQ:PSNY)
Number of Hedge Fund Holders: 12
Share Price: $1.32
Polestar Automotive Holding UK PLC (NASDAQ:PSNY) is a Swedish electric vehicle manufacturer that operates using an “asset-light” model and uses production facilities from Volvo and Geely in countries like China, the U.S., and South Korea. Originally a motorsport team named Flash Engineering, it later became Polestar Racing, Volvo’s performance partner, before Volvo acquired it in 2015 and refocused it on electric vehicles.
Its lineup includes the hybrid Polestar 1, limited to 1,500 units and discontinued in 2022, and fully electric models Polestar 2, 3, and 4. In August, Polestar began production of the Polestar 3 SUV in South Carolina to serve both U.S. and European markets, a strategic move to mitigate tariffs on Chinese-made vehicles. It is also the first model from the brand to be manufactured on two continents.
In Q3, Polestar (NASDAQ:PSNY) delivered around 11,900 vehicles, bringing the total for the year to 32,300. The company aims to achieve a positive gross profit margin by Q4 while expecting revenue to remain similar to 2023. The company plans to provide a strategic business update on January 16, 2025. To focus on its long-term objectives and yearly performance, it has opted for a more limited Q3 report. The company takes the 4th spot on our list of best EV penny stocks.
3. Commercial Vehicle Group, Inc. (NASDAQ:CVGI)
Number of Hedge Fund Holders: 13
Share Price: $3.03
Commercial Vehicle Group, Inc. (NASDAQ:CVGI) is a supplier of systems, assemblies, and components for the commercial vehicle, electric vehicle, and industrial automation industries. The company operates manufacturing facilities in several countries, including the U.S., Mexico, China, and others, with products sold mainly in North America, Europe, and the Asia-Pacific region. Its products serve some important markets such as North American commercial truck manufacturers, OEMs, and e-commerce retailers.
On September 20, TipRanks reported that Barrington analyst Gary Prestopino reaffirmed a Buy rating for Commercial Vehicle (NASDAQ:CVGI) with a price target of $6. His positive outlook is driven by the company’s growth in the electric vehicle market through its Electrical System segment, securing $150 million in new business for 2023, along with an additional $80 million year-to-date.
The company is also restructuring and reducing costs, including cutting its workforce by over 10%. In addition, on October 2, it announced the completion of the sale of its Cab Structures business in Kings Mountain, North Carolina, to a Volvo Group company. The company received $40 million from the sale, with $20 million paid in September and the remainder in October.
Commercial Vehicle’s (NASDAQ:CVGI) CEO James Ray, described the transaction as beneficial for both companies as it aligns with the company’s strategic focus on higher-growth markets. He also highlighted that the Kings Mountain employees would transition smoothly into Volvo’s operations.
2. Solid Power, Inc. (NASDAQ:SLDP)
Number of Hedge Fund Holders: 14
Share Price: $1.23
Solid Power, Inc. (NASDAQ:SLDP) is a Colorado company focused on solid-state battery technology, especially for electric vehicles and other industries. It is recognized for its sulfide-based solid electrolytes and licenses its unique cell designs and production methods. The company’s technology improves safety and increases energy density by 50-75% compared to traditional batteries, making it a strong contender for EVs, electronics, and aerospace applications.
The company produces solid-state battery cells and sulfide electrolytes, working with leading automakers like SK On, Ford, and BMW. It has pilot production lines to refine cell designs and is expanding electrolyte production while advancing cell development. Recent updates include growing electrolyte shipments and improvements in its A-2 cell design.
Solid Power (NASDAQ:SLDP) is expanding its partnerships, especially with SK On in Korea, where it aims to set up an EV cell production line by mid-2025. The company is strengthening its connections in Korea and Japan to increase involvement in the local battery markets.
Additionally, Solid Power (NASDAQ:SLDP) continues to collaborate with BMW to improve cell performance, with potential plans for BMW’s demo car program in the future.
Analysts’ sentiment shows a significant upside for the company’s stock as it has been covered by 5 analysts with an average price target of $3, representing an upside of nearly 144%, as of October 22.
1. ECARX Holdings Inc. (NASDAQ:ECX)
Number of Hedge Fund Holders: 17
Share Price: $1.87
Topping our list of best EV penny stocks is ECARX Holdings Inc. (NASDAQ:ECX), which is an automotive technology company focusing on the automotive sector’s shift towards software-defined vehicles, especially in the electric vehicle and intelligent car markets. As of Q2, its technology is now in over 6.9 million vehicles, with 472,000 added in the quarter, representing a 32% annual growth.
The company continues to expand, working with 17 automotive OEMs across 26 brands. Its technological portfolio is supported by approximately 600 registered patents and over 650 pending applications. In Q2, the company also announced several new vehicle models showing its computing platforms, including Lynk & Co models and Geely’s Galaxy E5.
The latest noteworthy car powered by ECARX (NASDAQ:ECX) is Lynk & Co’s Z10 BEV luxury sedan. It is powered by ECARX’s Makalu computing platform powered by AMD Ryzen Embedded V2000 processors.
The Makalu platform uses AMD Ryzen Embedded processors with integrated Radeon Graphics and provides advanced 3D graphics, security, and entertainment features. ECARX’s Cloudpeak software stack supports the platform’s performance, integrating infotainment and driver assistance systems.
In addition, ECARX (NASDAQ:ECX) began production at its Fuyang facility in the second quarter to improve its vertical integration strategy to reduce costs and improve efficiency. The company remains optimistic about continued growth, driven by technological innovation, global expansion, and diversified customer relationships.
While we acknowledge the potential of ECARX Holdings Inc. (NASDAQ:ECX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ECX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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