We recently published a list of 10 Most Oversold EV Stocks to Buy According to Analysts. In this article, we are going to take a look at where Lotus Technology Inc. (NASDAQ:LOT) stands against other most oversold EV stocks to buy according to analysts.
As per PwC, the race for EV adoption has been heating up, thanks to the tailwinds such as consumer interest, robust buy-in by automakers, and accelerated government funding. The electric transportation saw strong support from the 2021 Infrastructure Investment and Jobs Act – which finances $7.5 billion in EV charging infrastructure. Furthermore, the Inflation Reduction Act offered tax credits for new and used electric passenger and commercial vehicles.
What’s Next for EV Market?
As per Research and Markets, the EV market is anticipated to reach US$1.58 trillion in 2033 from US$600.13 billion in 2024. The growth is expected to be aided by increased public awareness, the requirement for reducing emissions, developments around battery technology, supportive government policies and incentives, and strong investments in renewable energy sources.
Governments and consumers continue to adopt EVs as a cleaner alternative to conventional ICE vehicles because of elevated concerns regarding environmental sustainability and the requirement to reduce greenhouse gas emissions, according to Research and Markets. Additionally, improvements in the electric car range, together with charging infrastructure due to battery technological developments, have been fueling industry expansion.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Factors to Support EV Transition
As per Dentons, the Polycentric Law Firm, emerging markets (EMs) continue to be central to global EV adoption, courtesy of increased urbanization, government incentives, and economic growth. Notably, the investments in EV infrastructure and battery technology have been fueling wider adoption. Furthermore, local manufacturing and innovation, including cost-effective EVs and off-grid charging stations, have been bolstering economic development in local EV industries of EMs.
The flexible manufacturing platforms continue to support OEMs in adapting more efficiently to fluctuating market dynamics, like regulatory changes and changes in consumer preferences. Dentons believes that alliances with Chinese EV makers are expected to allow legacy OEMs to use advanced EV technologies, cost-efficient production methods, and well-established supply chains provided by Chinese OEMs. This can help facilitate the transition of legacy OEMs to electrification. Overall, 2025 might need flexibility, innovation, and adaptation in the broader automotive industry amidst economic pressures and evolving consumer expectations. Through using the advancements in EVs, Software-Defined Vehicles (SDVs), and manufacturing technologies, OEMs can place themselves well in the highly competitive and dynamic market.
Our Methodology
To list the 10 Most Oversold EV Stocks to Buy According to Analysts, we sifted through several online rankings to shortlist the companies catering to the broader EV sector. Next, we chose the ones that have declined significantly over the past year and that analysts see significant upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of February 21. We also mentioned hedge fund sentiments around each stock, as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Photo by Obi Onyeador on Unsplash
Lotus Technology Inc. (NASDAQ:LOT)
% Decline Over 1 Year: ~81.9%
Average Upside Potential: ~94.6%
Number of Hedge Fund Holders: 11
Lotus Technology Inc. (NASDAQ:LOT) is engaged in designing, developing, and selling battery electric lifestyle vehicles. The company announced its preliminary vehicle delivery results for FY 2024. Lotus Technology Inc. (NASDAQ:LOT) delivered 12,065 vehicles in 2024, reflecting a YoY growth of more than 70% and boasting the top growth rate among leading luxury brands. In 2025, it plans to increase global deliveries by 20% with a 25% – 28% contribution from China.
Lotus Technology Inc. (NASDAQ:LOT) is focused on driving technological innovation to cater to broader market demand. It launched Hyper Hybrid EV technology, which is in line with the evolving market demands. The company remains optimistic to see strong progress in its intelligent driving business across the world with revenue of the business from customers other than Lotus increasing to $11 million with a YoY growth of 450%, making ~2% of total revenue.
While Lotus Technology Inc. (NASDAQ:LOT)’s gross margin for the first nine months of 2024 came in at 9%, declining 2 percentage points as compared to the same period of 2023 because of proactive management of the inventory due to trade protectionism, impact of inflation and macroeconomic uncertainties, high margin intelligent driving business managed to secure $130 million of total contract value to fuel future growth. Overall, the growth of the broader EV industry is expected to fuel demand for Lotus Technology Inc. (NASDAQ:LOT)’s luxury EVs because of its strong brand and advanced engineering.
Overall, LOT ranks 2nd on our list of most oversold EV stocks to buy according to analysts. While we acknowledge the potential of LOT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than LOT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
