πππAfter 3 volatile months in the markets, November is off to a great start with the US indexes closing higher. EV stocks have been hammered by the markets too and offer investors a great opportunity to bargain hunt them.
Which EV stocks are Good Buys now?
Share price jumped 8.8% in the past 5 days but is still down 25% in the past year. It is one of the most oversold EV stocks in the market. It reached a 52 week high of USD 16.18 and dropped a 52 week low of USD 7.00.
Nio reported 16,074 vehicles in October, a 60% increase year over year compared to 10, 059 vehicles. Nio's deliveries is up 2.77% compared to September.
Nio has just released an organisational and business optimisation plan on November 3, 2023 with an emphasis on execution efficiency in response to increasing competition in the Chinese EV market.
Nio plans to reduce its employees headcount by 10% to kickstart the plan which means at least 2,600 employees will be laid off.
According to CEO William Li, Nio launched 5 new products in 2023, capturing more than 40% of the battery electric vehicle segment with selling price of over RMB 300,000.
In June Nio signed a contract with CNOOC to build charging infrastructure in China. CNOOC is the 3rd largest Oil Producer in China.
In July, CYVN Holdings, the investment arm of Abu Dhabi invested almost USD 740 millio in Nio.
Nio has a strong brand in the Premium EV market. Nio's financial performance is expected to improve in the coming quarters as production ramps up. Nio expects deliveries to stabilise and sustain above 20,000 beginning in Q4 and is preparing its supply chain to support monthly deliveries of 30,000.
Nio stock looks undervalued compared to Li Auto and XPeng.
Wall Street Analysts are bullish on Nio with a Buy rating, Target price of USD 13.01, an upside potential of 57%.
Share price is up 13% in the past 5 days, and has jumped 116% in the past year.
XPeng delivered a record 20,002 vehicles in October of which Model G6 contributed 43%. XPeng is due to report its Q3 earnings on November 15.
In July XPeng has signed an agreement with the Volkswagen Group in which both companies will jointly develop 2 B class BEVs under Volkswagen brand, leveraging the strength of each other. Volkswagen will invest USD 700 million in XPeng which amounts to 5% of XPeng's shares.
This will give XPeng a golden opportunity to tap into the European EV markets too.
Wall Street Analysts are bullish on XPeng with a Buy rating, Target price of USD 19.43, an upside potential of 11%.
has led the way in deliveries with 40,422 deliveries in October, up a massive 300% from previous year.
Li Auto's share price is up 2.8% in the past 5 days and a huge 100% jump in the past year.
Li Auto's meteoric rise in share price is due to a string of robust delivery figures, driving substantial revenue and gross margin throughout the year.
Li Auto has rolled out 3 luxurious EVs, including the full size crossover SUV Li L9, the Mid size crossover Li L8 and the L7.
With impressive deliveries and strong revenue growth, Li Auto has attracted positive attention from Wall Street Analysts with a Buy rating, a Target price of USD 70.42, an upside potential of 94%.
$Rivian Automotive, Inc.(RIVN)$
Share price is up 10% in the past 5 days but is down a huge 43% in the past year. It is a far cry from its all time high of USD 172.01 on November 16, 2021. Amazon owns 16% of Rivian shares. Rivian has received an order of 100,000 custom delivery vehicles from Amazon to be delivered by 2030. Currently Amazon has 10,000 Rivian electric delivery vehicles on the roads across US and Europe.
Rivian also makes R1T pick up trucks and R1S sport utility vehicles too.
Rivian is slated to report its Q3 2023 earnings on November 7. The Zacks Consensus Estimate for Rivian is pegged at USD 1.36 loss per share and revenue loss of USD 1.36 billion.
Over the trailing 4 quarters Rivian surpassed earnings estimates in all 4 quarters, the average surprise being 15.2%.
In 3Q 2023, Rivian produced and delivered 16,304 and 15,574 vehicles, up from 7363 and 6584 vehicles respectively. Higher deliveries are likely to boost revenues.
Wall Street Analysts are bullish on Rivian with a Buy rating, Target price of USD 27.50, an upside potential of 55%.
$Faraday Future Intelligent Electric Inc.(FFIE)$
Share price is up 1.8% in the past 5 days but down a massive 97% in the past year. Faraday has undergone a 80 to 1 reverse stock split in August in order to meet Nasdaq's minimum requirement of USD 1 per share. It has a new CEO under Matthias Aydt who said that he will focus to reduce Faraday Futures costs cutting and increase sales revenue. It is going to be an uphill climb for this beleaguered company but if he succeeds he will be hailed as a hero. If not Faraday Futures will face an uncertain future.
So which EV stocks are Good Buys now? It is up to an individual investor's risk appetite. The EV competition is a tough one among the various EV companies. The Global EV market size is valued at USD 388.1 billion in 2023 and expected to reach USD 951.9 billion by 2030 at a CAGR of 13.7%. So investing in EV stocks is a great way to supercharge our returns but it is just as important to choose the right EV stock to realise that return.
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