5 Top EV Stocks for the Future of Transportation
Electric vehicles will soon dominate the roads — and these top EV stocks are leading the way.
The electric vehicle (EV) revolution is underway. Experts estimate that, by 2050, 82% of all new vehicles sold worldwide will be electric, rather than depending on diesel or gasoline.
There’s no turning back now.
Why is the world embracing EVs? Well, as it turns out, clean air is better than polluted air. And with countries all around the globe reducing their carbon emissions, electric vehicles are playing a big role.
What’s great for consumers — and investors — is that EVs have come a long way from some of the earlier attempts at vehicle electrification. Battery and technology advancements now allow automakers to produce far more impressive vehicles with longer battery ranges to make both treehuggers and road warriors equally happy.
The companies on this list offer some of the most exciting EVs on the market. They’re helping to shift consumer sentiment toward a more sustainable world — while keeping an eye on the bottom line.
Tesla (NASDAQ: TSLA)
- Tesla (NASDAQ:TSLA)
- Price: $943.9 (as of close Jan 21, 2022)
- Market Cap: $949.959B
It’s fitting to put Tesla at the top of this list. After all, the company single-handedly created a market for EVs that traditional automakers struggled to achieve for decades.
And by many metrics, Tesla is a massive success. In the third quarter of this year, Tesla’s vehicle deliveries soared 73%, and its automotive gross margins expanded to 30.5%. That helped the company’s adjusted earnings per share to skyrocket 145% year over year.
After hitting some bumps along the way, Tesla’s vehicle production is finally a success. Vehicle deliveries reached 500,0000 for all of 2020. And the company has already surpassed 628,000 deliveries in the first three quarters of 2021.
Tesla has built a loyal following over the years and now has 66% of the U.S. electric vehicle market. While that percentage will certainly drop as more EVs hit the market, Tesla is already a clear leader in this space.
The company continues to expand its automotive and battery facilities, which should help keep it competitive in the U.S. market and around the world. A recent prediction by Ark Invest CEO Cathie Wood (a noted Tesla bull) put the company’s global EV market share at 25% by 2026 — up from about 15% in the first half of 2021.
Tesla’s growing EV lineup, delivery growth, and soaring share price have been more than enough to convince investors that Tesla is building the future of transportation, battery by battery.
BYD (OTCMKTS: BYDDF)
While it’s wise to keep one eye on the U.S. electric vehicle market, another massive opportunity is opening up a world away in China.
China is the world’s largest auto market and the second-largest EV market, behind Europe. But just barely. In 2020, China accounted for 41% of all EV sales worldwide, while the whole of Europe took 42%.
And this is where China-based BYD comes in. The company reported sales of more than 80,000 plug-in cars (including some hybrids) in October of this year. The company’s battery-electric vehicles accounted for more than half of vehicle sales in the month and grew 187% year over year.
In addition to BYD’s strong and growing position in the Chinese EV market, investors have been drawn to the automaker because it’s caught the attention of billionaire investor and Berkshire Hathaway CEO Warren Buffett.
Buffett’s Berkshire Hathaway first bought BYD stock way back in 2008 and currently owns about 8% of the company.
Owning shares of some EV stocks can put investors on a wild ride at times, and BYD’s 2021 stock price moves are a good example. But even with this volatility, BYD stock price gains have doubled the S&P 500’s gains year-to-date. BYD’s shares have soared more than 400% over the past three years.
Lucid Group (NASDAQ: LCID)
- Lucid Group, Inc. (NASDAQ:LCID)
- Price: $37.75 (as of close Jan 21, 2022)
- Market Cap: $62.15B
A number of small EV companies have gone public lately. But one that stands out from the crowd is Lucid.
Lucid just started delivering its first vehicle, the $169,000 Air Dream edition luxury sedan, but it’s already garnered tons of attention. That’s because the Air has an industry-leading range of more than 500 miles and is already winning major awards.
Motor Trend just gave the Lucid Air its coveted “Car of the Year” award for 2022. That’s an impressive accomplishment for a car in just its first year of production.
Already, more than 17,000 reservations have been made for the Air, at varying price levels. Lucid estimates that it’ll produce 20,000 of them next year.
In addition to the company’s award-winning car and solid footing for vehicle production, Lucid’s management should interest investors as well. Lucid CEO and CTO Peter Rawlinson was the vice president of vehicle engineering at Tesla and the chief engineer of Tesla’s Model S. Not a bad resume for running an EV company.
Lucid is also planning ahead for further vehicle capacity in the coming years and says that its AMP-1 manufacturing plant in Arizona will be able to produce up to 90,000 vehicles by the end of 2023 — including the upcoming Project Gravity SUV.
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Rivian Automotive (NASDAQ: RIVN)
- Rivian Automotive, Inc. (NASDAQ:RIVN)
- Price: $64.51 (as of close Jan 21, 2022)
- Market Cap: $58.079B
Rivian is the youngest stock on this list. As of this writing, shares of the EV maker have been available for just over two weeks.
Investors have had their eyes on Rivian for quite some time — and with good reason. Rivian had many successful rounds of funding as a private company, including $700 million from Amazon and $500 million from Ford. That means Amazon and Ford own about 20% and 12% of the company, respectively.
And Amazon has taken its relationship with Rivian a step further by ordering 100,000 electric vans from the company. Amazon will use the massive fleet of vans to help reduce its carbon footprint as it expands its delivery services.
Rivian makes the R1T, an off-road pickup truck, and will begin production of the R1S, an SUV, soon. As I write, the automaker has delivered only about 150 vehicles total. But Rivian plans to increase production in the coming years and eventually reach annual production of 1 million vehicles by 2030.
To get there, Rivian is considering building another U.S. factory and a potential production facility in Europe as well.
Rivian has received a lot of attention since going public, especially because its share price skyrocketed in the first few days of trading. For a short while, it was the world’s second-most valuable automaker, after Tesla.
Rivian’s share price has given back some of those initial gains. That’s a good reminder that EV stock investors are likely to experience some volatility as these companies get their vehicle production up and running.
Volkswagen (OTCMKTS: VWAGY)
- Volkswagen AG (ADR) (OTC:VWAGY)
- Price: $29.18 (as of close Jan 21, 2022)
- Market Cap: $130.696B
I know I said this would be a list of EV stocks. Yet here I am slipping in a traditional automaker. But the fact is that all traditional carmakers are transitioning to EVs. VW is doing so in a very big way.
The company says that half of all its vehicles — including vehicles from its subsidiary brands such as Audi, Porsche, and Bentley — will be electric by 2030. That’s a massive commitment when you consider that in 2020 the company sold more than 9 million vehicles worldwide.
Volkswagen also says that by 2040 almost 100% of its new vehicles will be zero-emission in major markets. To reach those goals, Volkswagen is pouring more than $80 billion into future technologies, including battery tech and EVs, between now and 2025.
Part of this broader plan will come from VW establishing a controlled battery supply chain that includes everything from raw material to recycling, according to the company.
Shifting to EVs will help Volkswagen achieve its goals of reducing its carbon footprint by 30% by 2030 and becoming carbon neutral by 2050.
Investors have seized onto VW’s new strategy and have driven the automaker’s stock price up. Volkswagen shares have more than doubled the S&P 500’s gains over the past twelve months.
And while Volkswagen’s stock may not experience the same growth as some of the EV startups on this list, the automaker could be less volatile way to benefit from the coming growth of the electric vehicle market.