Is ON Semiconductor Corporation (ON) The Best Cheap EV Stock to Buy?

We recently compiled a list of the 12 Cheap EV Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where ON Semiconductor Corporation (NASDAQ:ON) stands against the other cheap EV stocks.

Ownership of EVs is rising in the US. On March 16, CNBC reported that currently there are nearly 6 million battery EVs and plug-in hybrids on the roads. While this represents only a small portion of the overall vehicle market, it marks significant progress and automobile manufacturers remain invested in the transition away from gasoline. It is worth noting that in 2024 sales of traditional internal combustion engine cars fell below 80% for the first time in modern history.

READ ALSO: 10 Cheap Technology Stocks to Buy According to Hedge Funds and 8 Fastest Growing AI Stocks To Buy Right Now.

The steady growth in EV sales suggests that consumer concerns about range anxiety are diminishing. However, this fear of running out of battery power remains a challenge for the EV market. The EV industry is working to address this by installing enough chargers in public places and expanding public charging infrastructure to drive wide-scale EV adoption. Despite many efforts, charging companies are finding it difficult to maintain growth because of political uncertainties.

The Trump administration has proposed stripping away federal incentives for EVs and instead prioritizing oil and gas policies. This creates a challenging environment for EV manufacturers and charging companies. Moreover, tariffs on essential steel and aluminum are further challenging automakers and their operations.

Despite current challenges, many believe that the EV sector is expected to grow significantly as it aligns with global sustainability goals and technological advancements. Additionally, innovations in battery technology and charging infrastructure continue to make EVs more affordable and feasible.

Methodology

To compile our list of the 12 cheap EV stocks to buy according to hedge funds, we looked for the biggest EV companies. We reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of the best EV stocks. To find cheap EV stocks, we narrowed down our selection by looking for stocks trading at under 20 times their forward earnings as of March 17, 2025. Next, we focused on the top 12 cheap EV stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds. Finally, the 12 cheap EV stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q4 2024.

Why do we care about what hedge funds do? 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).

Is ON Semiconductor Corporation (ON) The Best Cheap EV Stock to Buy?

An engineer examining an electric vehicle design in a lab, showing the company’s innovative battery systems.

ON Semiconductor Corporation (NASDAQ:ON)

Forward P/E: 16.81

Number of Hedge Fund Holders: 52

ON Semiconductor Corporation (NASDAQ:ON), or simply onsemi, is an American semiconductor manufacturing company that ranks among cheap EV stocks to invest in. The company offers over 80,000 parts, including advanced MOSFETs, Image Sensors, and Silicon Carbide technology (EliteSiC). With a focus on the EV and industrial end markets, ON Semiconductor Corporation (NASDAQ:ON) manufactures chips that are used in drive trains of EVs and other chips that help with driver-assistance systems. The company’s silicon carbide chips improve the range of EVs.

Currently, ON Semiconductor Corporation (NASDAQ:ON) is heavily focused on high-growth trends in automotive, industrial, and AI data centers. In January 2025, the company acquired Qorvo’s Silicon Carbide Junction Field-Effect Transistor (SiC JFET) technology business for $115 million in cash. This transaction includes the United Silicon Carbide subsidiary and strengthens ON Semiconductor Corporation’s (NASDAQ:ON) EliteSiC portfolio. The SiC JFET technology is expected to enhance energy efficiency and power density in AI data centers, particularly in the AC-DC stage of power supply units. The technology can also help replace multiple components with a solid-state switch in battery disconnect units to improve efficiency and safety in EVs. In the industrial end-market, the SiC JFET technology will enable ON Semiconductor Corporation (NASDAQ:ON) to support certain energy storage topologies and solid-state circuit breakers.

Overall, ON ranks 2nd on our list of the cheap EV stocks to buy according to hedge funds. While we acknowledge the potential of ON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ON but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.