Which are the Best EV stocks To Buy Now?
πππEVs are one of the Fastest Growing sectors in recent years and EVs are expected to represent 31% of global passenger vehicle sales by 2030.
Which are The Best EV stocks to buy now?
Is not only the biggest company in the EV space. Tesla is the biggest car maker in the world, traditional or electric and one of the 10 largest companies in the US. It is also part of the Magnificent 7.
However Tesla's share price is rather volatile. Just this week Tesla had a 4 day 18% rally until Thursday. Tesla's share price fell following comments by CEO Elon Musk in support of an anti semitic post on X, formerly known as Twitter.
On November 9, HSBC's analyst Michael Tyndall wrote that Tesla vehicles may well be the main driver of revenue and profits. However he said the the time line for Tesla's future prospects and ideas like robots, full self driving is likely to be longer than the valuation it is reflecting.
However Tesla has gained ground in November ahead of Cybertruck deliveries beginning at the end of the month. Tesla delivered 466,000 vehicles in Q2 2023. In Q3 Tesla produced over 430,000 vehicles and delivered over 435,000 vehicles. With these results Tesla has delivered 1.3 million vehicles year todate. Its target of 1.8 million vehicles by end 2023 remains unchanged.
The key for Tesla is that it is a profitable company with earnings of USD 1.9 billion in Net income on USD 23.4 billion in revenue in Q3 2023. The figures reflect an increase in revenue from USD 21.4 billion in the previous year quarter but a big dip in profits falling from USD 3.3 billion in the previous year quarter. This is due to Tesla's price cutting which has affected its bottom line.
Tesla has new updated versions of Model 3 coming to Europe and new updated Model Y in China. More automakers are using Tesla 's charging stations in the US.
Tesla commands almost 60% of the EV market. However Tesla is not just an EV company. It is also into batteries, Robotics and solar panels.
Performance wise Tesla is up 8% in the past 5 days and a huge 116% year todate. Wall Street Analysts are bullish on Tesla with a Buy rating, Target price of USD 248.93, an upside potential of 6%.
focuses on luxury SUVs that target high end consumers. Li Auto delivered 40,422 vehicles in October. That is an increase of more than 302% year over year. In China, Li Auto delivered 41% more vehicles than Tesla in October. The added deliveries also came with a slight increase in the company's margins which are now over 21%. Margin growth over the last year is up more than 9%.
For Q3 2023, Li Auto reported sales growth of 271.6% a year on year basis to USD 4.61 billion. For the same period Li Auto reported free cash flow of USD 1.8 billion and ended the quarter with a cash buffer of USD 12.13 billion.
Li Auto's growth has been fuelled by launch of new models and aggressive retail expansion. With Li MEGA due for launch in December, there is healthy growth for next year. Overall Li Auto seems like a cash flow machine and will continue to grow exponentially in value with new models.
Performance wise Li Auto is up 7% in the past 5 days and 94% year todate. Wall Street Analysts are bullish on Li Auto with a Buy Rating, Target price of USD 51.64, an upside potential of 27.5%.
$Rivian Automotive, Inc.(RIVN)$
is down nearly 15% after the recent earnings report. Rivian exceeded expectations for both top and bottom lines and reiterated its bullish production guidance. Rivian also announced that it was no longer bound to its exclusive contract with Amazon for production of Class 4 vehicles. Rivian is also building its manufacturing facility in Georgia.
Performance wise Rivian is up 8.8% in the past 5 days but down 3.7% year todate. Wall Street Analysts are bullish on Rivian with a Buy rating, Target price of USD 26.11, an upside potential of 56%.
reported USD 1.2 billion of sales in its latest earnings report this week. It has beaten Wall Street expectations of USD 1.1 billion. It's EV deliveries totalled 40,008 units from 23,205 in the preceding quarter and 29,570 in the same period a year ago. XPeng made a USD 480 million adjusted loss versus Analyst's forecast of USD 400 million.
XPeng 's vehicle deliveries have grown for 9 consecutive months and its free cash flow has substantially improved.
In July 2023, XPeng signed a contract with Volkswagen to develop 2 new EV models for Volkswagen. Volkswagen has also invested USD 700 million into XPeng.
Performance wise XPeng is up 7.6% in the past 5 days and 65% year todate.
Wall Street Analysts are bullish on XPeng with a Buy rating, Target price of USD 27.59, an upside potential of 64%.
Competitive edge includes a battery swapping model which avoids long charging waits, providing a superior user experience. Nio's bold designs and premium interiors differentiate the company stylistically from budget Chinese EVs. Brand prestige aids pricing power.
In June 2023, Nio has signed a strategic agreement with CNOOC to build charging infrastructure in China. CNOOC is the 3rd largest Oil production company in China. Also in June 2023, Nio received more than USD 700 million from a fund owned by the Abu Dhabi government.
Nio reported deliveries of 16,074 vehicles in October, up from 10,059 delivered in October 2022, an increase of 59.8%.
Performance wise, Nio is down 1.5% in the past 5 days and a negative 23% year todate. Wall Street Analysts are bullish on Nio, with a Buy rating, Target price of USD 12.31, an upside potential of 66%.
Of all the 5 EV stocks, I like Tesla best as it is the market leader in the EV industry. However Li Auto shows the most promise with its huge growth in deliveries and improved margins. Li Auto has also been profitable for 4 consecutive quarters. This is certainly remarkable given the intense competition among the EV companies.
The EV market is huge and fast growing. By 2030, EV sales will receive 40% of the new car sales. By 2040, almost all cars will be EVs. So it is a great tactical play to start investing in quality EV stocks now to reap substantial rewards in the future despite the volatility in their share prices.
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