Billionaires Love These 10 EV Stocks

In this article, we shall discuss how billionaires love these 10 EV stocks.

Energy is the foundational backbone of the global economy. With the escalation of the climate crisis, world leaders are adamant on reducing global carbon emissions, leading the energy sector to rapidly transition from fossil fuels and non-renewables to newer, greener sources of energy. According to the McKinsey Technology Trends Outlook 2022, clean energy technology, with a collective investment of $257 billion in 2021, is leading investments when compared to the 14 most significant technology trends in the world today. Analysts at McKinsey opine that clean energy technology could witness investments peak to more than $1.5 trillion by 2035, a move which will aid in driving zero-carbon solutions and curtailing greenhouse gas emissions. Moreover, another report by McKinsey states that the United States, China, and Europe have boosted environmental regulations by 20% in less than two years. This has caused venture capitalists and hedge fund managers to pour billions into the clean energy sector, which is expected to be up and running in full swing by 2030.

According to a recent report by McKinsey and Company, as technology and interest adapt to the newfound demand for clean energy, the electric vehicle (EV) landscape is rapidly transforming in hopes to keep up. In the United States, electric vehicles sales have increased by more than 40% every year since 2016. By 2035, the largest automotive markets will have successfully completed a 100% transition to an electric model. The report further goes on to ascertain that with petroleum prices skyrocketing due to geopolitical instability in Europe, and efforts by the global community to curtail carbon emissions, the EV sector offers a significant economic opportunity. Furthermore, according to McKinsey, regulations and incentives in China and Europe are likely to catapult EV market share to at least a third of all light-vehicle sales. In the United States however, a significantly aggressive increase in sales is still required to achieve the same level of market share.

An analysis by McKinsey and Company has determined that EV stocks will continue to deliver great returns for at least another two decades. A 2021 survey by the company outlines six key factors which will sustain the current growth in popular EV stocks. These key factors include the correct assessment of value pools, brilliant software integration, domination of the talent war, a renewed and determined focus on green energy sources, maintaining healthy customer relations, and continually offering new purchasing options. Billionaires have been loading up on prominent EV stocks like Tesla Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and Ford Motor Company (NYSE:F).

Israel Englander of Millennium Management

Our Methodology

For this article, we picked some of the most popular EV stocks. We then shortlisted stocks which have shown to be a consistent point of interest for some of the most well-known billionaires in the game. Then, we ranked these stocks based on the number of hedge funds which hold stakes in them, as of Q2 2022.

Insider Monkey’s database tracking 895 elite hedge funds was used to gauge hedge fund sentiment around each stock.

Billionaires Love These 10 EV Stocks

10. Toyota Motor Corporation (NYSE:TM)

Hedge Fund Holdings: 12

Notable Billionaires Having Stakes in TM: D.E Shaw, Paul Tudor Jones, Ken Fisher

Toyota Motor Corp. (NYSE:TM) is a Japanese multinational automotive manufacturer based in Aichi, Japan. It is one of the largest automotive manufacturers in the world, producing over 10 million units per year. As of 2022, Toyota Motor Corp. produces vehicles under four brands namely Daihatsu, Hino, Lexus, and Toyota. In August 2022, Toyota Motor Corp. announced an investment plan of up to $5.6 billion in Japan and the United States, to supply automotive batteries for battery electric vehicles. The company aims to begin battery production  between 2024 and 2026.

Of the 12 hedge funds which have stakes in Toyota Motor Corp. as of Q2 2022, 8 are managed by billionaires like D.E Shaw of D.E Shaw, Paul Tudor Jones of Tudor Investment Corporation, and Ken Fisher of Fisher Asset Management. Hedge fund sentiment around Toyota Motor Corp. has increased considerably in the second quarter of 2022, with 12 hedge funds having a collective stake of $849.4 million, compared to Q1 2022, where only 9 hedge funds had stakes in Toyota.

In Q2 2022, Toyota Motor Corp. posted an EPS of $0.21, beating estimates of $0.18 by $0.03. Total revenue soared in the second quarter of 2022, with the company posting figures of $232.2 million. Toyota is the world leader in hybrid EV products, and one of the largest companies in the world to encourage mass-market adoption of hybrid vehicles. Toyota Motor Corp. has been criticized for being slow in adding battery powered electric vehicles to its lineup. One of the company’s first all-electric vehicle was RAV4 EV was developed in response to CARB’s mandated determination to make every automation company offer zero-emissions vehicles. Moreover, Toyota Motor Corp. has been developing and building solid-state batteries in partnership with Panasonic,  in which the company has more than a thousand patents covering solid-state batteries.

9. Honda Motor Company Ltd. (NYSE:HMC)

Hedge Fund Holdings: 14 

Notable Billionaires Having Stakes in HMC: Israel Englander, Jim Simons, Ken Griffin

Headquartered in Minato, Tokyo, Honda Motor Co. (NYSE:HMC) is a Japanese public multinational conglomerate manufacturer of automobiles, motorcycles, electric vehicles, and power equipment. By 2015, Honda was the eighth largest automobile manufacturer in the world. Billionaires have been increasingly optimistic about Honda, with the likes of Israel Englander of Millennium Management, Jim Simons of Renaissance Technologies, and Ken Griffin of Citadel Investment Group holding significant stakes in the stock as of Q2 2022. As of the second quarter of 2022, Ken Fisher’s Fisher Asset Management is the largest shareholder in the stock, owning more than 8.8 million shares worth around $213 million.

Honda has had a diverse portfolio of electric vehicles including the all-electric Honda EV Plus that was introduced in 1997, the Honda Fit EV introduced in 2012, and the Honda Accord Plug-in Hybrid, which was introduced in 2013 and has an all-electric range of 13 miles. In August 2022, Honda and LG Energy Solution announced a joint venture to construct a new lithium-ion battery factory in the U.S. for Honda and Acura electric vehicles.

Hedge fund sentiment around Honda has increased in the second quarter of 2022, with 14 hedge funds long the stock, up from 12 funds in the preceding quarter. Of the 14 hedge funds which have stakes in Honda, at least 6 of them are managed by billionaire investors.

Although it has been a long standing player in the ICE market, the company is perfectly set to execute a demonstration line of all-solid-state batteries by 2024 and launch over 30 models by 2030, by investing more than $36 billion in R&D. Moreover, the fully electric 2024 Honda Prologue SUV is set to kickstart a new era of electrified Honda vehicles. According to Wall Street analysts, Honda’s (NYSE:HMC) EV initiatives make it a long-term buy and hold stock, as the strong legacy business of the company facilitates its penetration of the EV market.

8. XPeng Inc. (NYSE:XPEV)

Hedge Fund Holdings: 24

Notable Billionaires Having Stakes in XPEV: Jim Simons, Ray Dalio, Catherine D. Wood

Headquartered in Guangzhou, Guangdong, XPeng Inc. (NYSE:XPEV) is a Chinese auto manufacturing company which specializes in the production and development of electric vehicles. As of the second quarter of 2022, XPeng posted an EPS of -$0.46, trailing behind estimates of -$0.29 by $0.17. On August 24, Citi analyst Jeff Chung lowered the price target on XPeng to $27.87 from $51.59, maintaining a Buy rating on the stock. In a research note, the analyst attributed the new price target to the company’s Q2 2022 returns, noting that the Q3 sales volume guidance is incredibly conservative. Due to multiple uncertainties, including the pandemic, consumption downgrade, and supply chain challenges, the volume forecasts were lowered.

Investor interest around XPeng has depleted in the second quarter of 2022, with 24 hedge funds long the stock, compared to 26 in the preceding quarter. Like Tesla Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and Ford Motor Company (NYSE:F), XPeng is also an EV stock which is incredibly loved by billionaires, with prominent billionaires like Jim Simons of Renaissance Technologies, Ray Dalio of Bridgewater Associates and Catherine D. Wood of ARK Investment Management having significant stakes in XPeng. As of Q2 2022, billionaire Chase Coleman’s Tiger Global Management LLC is the largest shareholder in XPeng, owning more than 4.3 million shares worth $138.3 million.

Of late, XPeng has seen an increase in product sales. However, the company’s rate of growth has seen a significant year-over-year decline. In August 2022, XPeng delivered 9,578 electric cars, 33% more than a year ago. However, though these figures may seem impressive at surface level, they are no where close to the 100%, 200%, or higher increase that the company has reported in the past. XPeng’s (NYSE:XPEV) P7, the company’s top-selling model, appears to be the reason behind the slight decrease year-over-year. So far in 2022, XPeng car sales have exceeded 90,000 units, making it one of the most prospective emerging auto brands in China.

7. NIO Inc. (NYSE:NIO)

Hedge Fund Holdings: 25

Notable Billionaires Having Stakes in NIO: John Overdeck, D.E Shaw, Israel Englander

Based in Shanghai, NIO Inc. (NYSE:NIO) is a Chinese multinational automobile manufacturer which specializes in the design, development, and production of electric vehicles. The company is infamous for its revolutionary development of battery-swapping stations for the company’s vehicles, meant as an alternative to conventional charging stations. Billionaires have been crazy about the stock in 2022, stacking up on shares significantly since March 2021. These billionaires are John Overdeck of Two Sigma Advisors, D.E. Shaw of D E Shaw, and Israel Englander of Millennium Management. Jim Simons’ Renaissance Technologies is the biggest stakeholder in NIO Inc., with the billionaire investor owning more than 17.8 million shares worth at $386 million.

On September 1, NIO Inc. announced its August 2022 delivery results, declaring that the company delivered 10,677 vehicles in August 2022, pointing to a percentage increase of 81.6% year-over-year. Furthermore, in August, the production and delivery of the ES7, a mid-large five-seater premium start electric SUV based on NIO Inc., has begun to take flight steadily. Over 398 ES7s were delivered to users in August 2022.

Horos Asset Management, an investment management firm, mentioned NIO Inc. in their Q1 2022 investor letter. This is what they had to say:

“At the beginning of April the CSRC (China Securities Regulatory Commission) announced possible changes in its regulation that would allow this inspection by foreign auditors, provided that the companies previously communicate to this body the state secrets that would be exposed, as well as the sensitive information that they might have to hand over, and the subsequent audit is carried out in a framework of collaboration with the CSRC. In short, a move in the direction desired by the SEC, although still far from the optimal result, that is, unrestricted access to information. While these negotiations between the two regulatory bodies are progressing, Chinese companies have to decide how best to preserve their interests. Other entities, such as the electric vehicle manufacturer Nio, have just started trading on this stock market.”

6. Stellantis N.V. (NYSE:STLA)

Hedge Fund Holdings: 25

Notable Billionaires Having Stakes in STLA: Ken Griffin, Israel Englander, Steve Cohen

Headquartered in Amsterdam, Stellantis N.V. (NYSE:STLA) is a Dutch multinational automotive manufacturing corporation which specializes in the design, development, manufacture and sale of ICE and EV units. As of 2021, Stellantis N.V. is the fifth largest automaker in the world in terms of global vehicle sales in 2021, with more than 300,000 employees in over 130 countries all around the world.

Hedge fund sentiment around Stellantis N.V. has worsened vigorously, with only 25 hedge funds long the stock in the second quarter of 2022, compared to 29 in Q1 2022. Like Tesla Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and Ford Motor Company (NYSE:F), Stellantis N.V. is a billionaire-favorite stock, with prominent billionaires like Ken Griffin, and Israel Englander having enormous stakes in the stock. Arrowstreet Capital is the largest shareholder in the stock as of Q2 2022, with the hedge fund owning more than 37 million shares worth at $456.8 million.

On August 2, RBC analyst Tom Narayan raised the price target of Stellantis N.V., to EUR 21 from EUR 19, maintaining a Sector Perform rating on the shares.

5. Li Auto Inc. (NASDAQ:LI)

Hedge Fund Holdings: 28

Notable Billionaires Having Stakes in LI: Noam Gottesman, John Overdeck, Israel Englander

Based in Beijing, Li Auto Inc. (NASDAQ:LI) is a Chinese automotive company which specializes in the design, development, and sale of premium smart electric vehicles. Founded in 2015, the company has a market capitalization of $28.9 billion as of September 3, and is one of the biggest players in the global EV sector. Billionaires have been stacking up on Li Auto Inc. shares for quite some time, including the likes of Noam Gottesman of GLG Partners, John Overdeck of Two Sigma Advisors, and Israel Englander of Millennium Management. Of the 28 hedge funds that had stakes in Li Auto Inc. in Q2 2022, at least 15 of them were owned by billionaires.

On August 8, CLSA analyst Aaron Li initiated coverage of Li Auto Inc. with a Buy rating and a HK$190 price target. According to the analyst, Li Auto has achieved remarkable success in China’s family SUV market and he expects the second model launched in Q2 2022, the L9, to continue to attract family consumers. Li Auto Inc. delivered more than 11,000 vehicles overall in May, showing a strong supply resilience. The company is expected to deliver about 450,000 units a year in 2022-2024, the analyst predicted in a research note.

On August 15, Li Auto Inc. reported their Q2 2022 returns, posting a revenue of $1.3 billion against a consensus of $1.12 billion. Li Auto’s (NASDAQ:LI) deliveries stood at 28,687 in Q2 2022, representing a 63.2% year-over-year increase. Hedge fund sentiment around Li Auto Inc. remained virtually the same, with 28 hedge funds long the stock in Q1 and Q2 of 2022. As of Q2 2022, Tiger Global Management LLC is the largest shareholder in the company, owning more than 12.8 million shares worth $490.03 million.

4. Rivian Automotive Inc. (NASDAQ:RIVN)

Hedge Fund Holdings: 35

Notable Billionaires Having Stakes in RIVN: Ken Griffin, Paul Tudor Jones, George Soros

Headquartered in Irvine, California, Rivian Automotive (NASDAQ:RIVN) is an American electric vehicle automaker and automotive technology company. The company has currently undertaken the manufacture and development of an electric sport utility vehicle and pickup truck on a skateboard platform, which will support future vehicles or be adopted by other companies. As of Q2 2022, Rivian Automotive posted an EPS of -$1.62, beating estimates of -$1.63 by $0.01. Furthermore, the company reported a total revenue of $364 million in the second quarter of 2022.

Hedge fund sentiment around Rivian Automotive has drastically increased in Q2 2022, with 35 hedge funds reporting stakes in the stock, compared to 29 hedge funds in Q1 2022. Of the 35 hedge funds long Rivian Automotive, at least 20 are managed by billionaires, the most prominent being Ken Griffin of Citadel Investment Group, Paul Tudor Jones of Tudor Investment Group, and George Soros of Soros Fund Management. As of the second quarter of 2022, billionaire Philippe Laffont of Coatue Management is the largest stakeholder in Rivian Automotive, having a total stake of $485.9 million.

Here is what Alger Capital had to say about Rivian Automotive  in their Q2 2022 investor letter:

“Rivian Automotive, Inc. (NASDAQ:RIVN) is a vertically integrated electric vehicle (EV) manufacturer producing consumer and commercial vehicles. Rivian plans to capture more of the lifetime value of vehicles than traditional original equipment manufacturers by offering insurance, software like advanced driver assistance, and charging network memberships. the shares contributed to performance as Rivian’s quarterly production rate accelerated despite industry supply chain issues.

Additionally, management reiterated its guidance and explained that it has significant pre-orders (including a large delivery van order) and increased pricing underscores healthy demand for its vehicles.”

3. Ford Motor Company (NYSE:F)

Hedge Fund Holdings: 46

Notable Billionaires Having Stakes in F: Israel Englander, Ray Dalio, Steve Cohen

Based in Dearborn, Michigan, Ford Motor Co. is an American multinational automobile manufacturer which specializes in the manufacture of ICE and EV products. It is the second largest U.S-based automaker, and fifth largest in the world based on 2015 vehicle production. In October 2014, Ford Motor Co. launched its plug-in electric vehicle initiative and the company’s portfolio now includes PEVs like Ford Ranger EV, and the Ford Focus Electric. As of Q2 2022, the company posted an EPS of $0.68, beating estimates of $0.45 by $0.23.

Investor interest in Ford Motor Co. has not changed since Q1 2022, with 46 hedge funds long the stock in Q1 and Q2 2022. Of the 46 hedge funds having stakes in Ford Motor Co. in Q2 2022, more than 26 are managed and operated by billionaires. Some of the most prominent billionaires to have significant stakes in Ford Motor Co. are Israel Englander of Millennium Management, Ray Dalio of Bridgewater Associates, and Steve Cohen of Point72 Asset Management. Billionaire Ken Griffin’s Citadel Investment Group is the biggest shareholder in Ford Motor Co., owning more than 29 million shares valued at around $323.2 million.

On August 2, Citi analyst Itay Michaeli raised the price target on Ford Motor Co. from $15 to $16, maintaining a Neutral rating on the stock. The analyst updated the targets for most automakers post Q2 results, also closing his ’90-day Upside Catalyst Watch’ on Ford Motor Co., as he believes the near-term catalysts have been realized.

Baron Funds, an asset management firm, mentioned Ford Motor Co. in their Q1 2022 investor letter, a copy of which can be obtained here. This is what they had to say:

“Ford (NYSE:F) is another example of typical industrial manufacturing business executive mindsets. The April 18, 2022, Bloomberg Businessweek cover story features Ford CEO Jim Farley behind the wheel of an electrified Ford F-150 Lightning. The article is titled, “Hey Elon, THIS is a truck.” I thought the article was terrific. One idea especially stood out to me. Since the F-150 is such a popular vehicle, it “argued for a gradual approach to electrification. Essentially the company retrofitted an existing F-150 with an electric powertrain rather than develop an entirely new truck.” No all-in financial and operation bet by this company on electrification.”

2. Tesla Inc. (NASDAQ:TSLA)

Hedge Fund Holdings: 72

Notable Billionaires Having Stakes in TSLA: Catherine D. Wood, Philippe Laffont, Ken Griffin

Based in Austin, Texas, Tesla Inc. is an American multinational automotive and clean energy company which specializes in the design and manufacture of electric vehicles, battery energy storage from home to grid-scale, solar panels, solar roof tiles, and related products and services. It is one of the world’s most valuable companies, with a total market capitalization of $846.7 billion as of September 3. Tesla Inc. has been a hot bed for billionaire investors, with 14 of the top 15 hedge funds long Tesla Inc. managed by billionaires. Ken Griffin’s Citadel Investment Group is the largest shareholder in the stock, owning more than 20.8 million shares worth around $14.04 billion. Other prominent billionaires to have significant stakes in Tesla Inc. are Catherine D. Wood of ARK Investment Management, Israel Englander of Millennium Management, and Philippe Laffont of Coatue Management.

On September 1, Piper Sandler analyst Alexander Potter raised the price target on Tesla Inc. to $360 from $344, keeping an Outperform rating on the stock. The analyst noted that several cross-currents may cause a dip in shares of Tesla Inc. in the coming weeks, including shorter wait times, China weakness and rising interest rates. The analyst also predicted that Tesla Inc. will slash prices sometime in 2023. Given all this, some investors might conclude that Tesla Inc. faces a demand problem. However, the analyst points to the contrary, stating that shorter wait times suggest improving supply, not falling demand. He boosted the price target to accurately reflect the company’s decision to increase pricing on its full self-driving software.

Hedge fund sentiment around Tesla Inc. has decreased in the second quarter of 2022, with 72 hedge funds long the stock, compared to 80 in Q1 2022. The company posted an EPS of $0.76 in Q2 2022, beating estimates of $0.6 by $0.16.

Baron Funds, an asset management firm, mentioned Tesla Inc. in their Q2 2022 investor letter. This is what they said:

“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:

1. First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;
2. second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.

Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful.

Regardless, I was right to have spoken with Roger. That was since he outlined numerous issues we needed to consider, study, and question before we determined whether we believed Tesla could be a successful business…before we ultimately chose whether to invest in that company.

When we completed our initial due diligence on Tesla, which diligence has been ongoing since 2014, we decided to invest $360 million in Tesla over the next two years. I then called Roger and outlined why I thought we could earn 20 times our capital over the next 10 years. Roger was so certain I was wrong that he offered to bet me $1 million that Tesla would fail. “Roger, I can’t bet you a million dollars. First, if you are right, I couldn’t afford to pay you. Second, if I’m right, you’re my friend, and I couldn’t take your money.” We settled on a dinner bet…” (Click here to see the full text)

1. General Motors Company (NYSE:GM)

Hedge Fund Holdings: 75

Notable Billionaires Having Stakes in GM: Warren Buffett, D.E Shaw, Ken Griffin

Headquartered in Detroit, Michigan, the General Motors Company is an American multinational automotive manufacturing company which operates manufacturing plants in eight countries. Its four core brands include Chevrolet, Buick, GMC, and Cadillac, making it the largest automaker in the United States. On July 27, Wedbush analyst Daniel Ives lowered the price target on General Motors to $42 from $50, maintaining an Outperform rating on the stock. The analyst noted that General Motors reported Q2 results which were marred with a myriad of supply chain issues, which he views as a clear near-term headwind for the Detroit-based stalwart. Nonetheless, Ives ascertained that General Motors has a strong and detailed EV vision looking at the company’s plans over the next decade. On the guidance front, the company reiterated its guidance for full year 2022 with a healthy second half of the year ramp now on the horizon.

Investor interest around General Motors has slightly decreased in Q2 2022, with 75 hedge funds long the stock, compared to 76 in the preceding quarter. Famous billionaires like Warren Buffett of Berkshire Hathaway, D.E Shaw of D E Shaw, and Ken Griffin of Citadel Investment Group have stakes in the company.

Here is what Diamond Hill Capital had to say about General Motors in their Q1 2022 investor letter, a copy of which can be obtained here:

“General Motors—and the auto industry in general—continues to face headwinds related to supply chain disruptions and raw material cost inflation. In addition, uncertainty surrounding global energy markets due to inflation and the conflict in Ukraine has created a greater economic burden on consumers, which tends to slow automotive sales.”

You can also take a peek at 10 Good Paying Jobs For 18 Year Olds and 10 Best Construction Materials Stocks To Buy Now.

Follow Insider Monkey on Twitter

Suggested Articles:

• 15 Largest Distribution Companies In The World
• Top 10 Video Gaming Stocks To Buy Now
• 15 Largest Chemical Companies in the World

This article is originally published at Insider Monkey.