We recently published a list of 11 Hot EV Stocks to Buy Now. In this article, we are going to take a look at where EVgo, Inc. (NASDAQ:EVGO) stands against the other hot EV stocks to buy now.
Just like any new technology, there is a lot of skepticism about the electric vehicle (EV) industry as well. Some believe that the technology is not viable while others are worried if the infrastructure will be enough to meet the charging demand and so on.
However, the electrification of vehicles is inevitable in the future. While there has been a slowdown in EVs in the US and Europe, China’s dominance and growth in the industry are a testament to the fact that the technology will take over internal combustion engines relatively soon.
We discussed the dominance of the Chinese EV industry in our article, 11 Small Cap EV Stocks to Invest In. Here is an excerpt from the article:
“While the growth in the US and Europe is slowing down, China is picking up a significant pace and dominating the EV landscape. According to a World Economic Forum report, Chinese EVs are much cheaper than their Western counterparts, with an average price of $34,400, compared to $55,242 in the U.S. The price gap is driven by lower labor costs, favorable government subsidies, and more affordable battery sourcing.
Chinese automakers now produce more than half of the world’s EVs and are using their cost advantages to potentially dominate the global market. As Chinese brands gain scale and expertise, their competitive pricing could allow them to challenge Western automakers.”
A lot of the EV slowdown in the West is attributed to the removal of subsidies, higher prices compared to gas-powered cars, and limited charging infrastructure. Nevertheless, some governments are now considering reinstating subsidies, and automakers are working to introduce more affordable EV models to boost demand and recover market share.
Burning Question: Is EV and Battery Manufacturing Worse for Climate?
While it is clear that EVs are better for the environment, many people have raised questions about the impacts of EVs and battery production on the environment. According to a report posted on the MIT Climate portal in 2022, Sergey Paltsev from MIT’s Joint Program on the Science and Policy of Global Change explained that despite the manufacturing emissions, EVs have a significantly lower environmental impact compared to gasoline-powered cars.
The higher emissions from manufacturing EVs, especially due to the production of their lithium-ion batteries, are offset by the cleaner operation of EVs over their lifetime. Charging emissions vary depending on the energy source.
In regions using clean energy like hydropower, EVs have a very low carbon footprint, while in areas reliant on coal, the emissions are higher. However, even in the worst scenarios, EVs generally outperform gasoline vehicles in terms of emissions.
Moreover, studies from MIT and the U.S. Department of Energy show that EVs consistently produce less carbon dioxide per mile driven than hybrids or gas-powered cars. For example, the average EV emits 25% less CO2 than hybrids when using the U.S. grid’s energy mix, and this gap widens in regions with cleaner energy.
Our Methodology
For this article, we scoured stock screeners and ETFs to identify nearly 50 stocks that were involved in the EV industry in a significant capacity. Next, we narrowed our list to 11 stocks that had double-digit year-to-date share price growth as of September 30 and were most widely held by institutional investors. It is important to note that the share price returns were calculated while the market was open which could result in fluctuations compared to the provided data. Finally, we listed the 11 hot EV stocks to buy in ascending order of their hedge fund sentiment, which was taken from Insider Monkey’s database of over 900 elite 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).
A businessman plugging in to a public charging station, symbolizing the services provided by the company.
EVgo, Inc. (NASDAQ:EVGO)
Year-to-date Share Price Returns: 26.06%
Number of Hedge Fund Holders: 11
A hot EV stock, EVgo, Inc. (NASDAQ:EVGO) is one of the most significant players in the EV charging industry. It mainly focuses on fast-charging solutions and manages a network of thousands of charging stations. According to the company, over 145 million people live within 10 miles of the company’s charging stations.
The company has partnerships with several big names in the automotive-related industries that create huge growth catalysts for its future. In the ride-sharing segment, it has partnered with notable partners such as Uber and Lyft.
The company also works with automotive brands like Nissan, BMW, Chevrolet, Tesla, Kia, Ford, and Hyundai to provide EV drivers with charging options and access to one of the largest public fast-charging networks in the country.
EVgo (NASDAQ:EVGO), in collaboration with General Motors, installed the thousandth fast-charging stall in 2023. In 2024, the companies announced on September 12 that they are expanding their partnership by introducing 400 fast-charging stalls at some major locations across U.S. cities. These stations will feature high-speed 350kW chargers and amenities like canopies and pull-through access.
The first location is expected in 2025, with the stations positioned near shopping and dining areas. The current expansion builds on their ongoing collaboration to construct 2,850 DC fast-charging stalls, with plans to reach 2,000 stalls by the end of 2024.
Overall EVGO ranks 8th on our list of hot EV stocks to buy now. While we acknowledge the potential of General EVGO 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 EVGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
