In this article, we discuss the 10 most popular EV stocks among famous hedge funds.
In 2020, 5% of the new car sales were attributed to electric vehicles, and the number of EV units sold are expected to reach over 5 million in 2021. China and Europe were the leading markets for electric vehicles in 2020, with purchases of EVs amounting to approximately 1.2 million in China and 1.4 million in Europe, which was 4 times higher than the US sales. It has been forecasted that as climate change, net-zero emissions, and clean energy become more significant for people, electric vehicles will account for 48% of the total vehicles sold in 2030.
Europe’s overall car market dipped by 22% in 2020, but the registrations for electric vehicles were at an all time high of 1.4 million. It was observed that European automakers who were manufacturing electric vehicles were offered government subsidies and stimulus packages to counter the COVID-19 pressures, since 2020 was the year that the European Union put a restriction on average carbon dioxide emissions per kilometer driven for new cars.
Several companies have set net-zero emissions targets for the near future including market leaders like Apple Inc. (NASDAQ:AAPL), Ikea, Verizon Communications Inc. (NYSE:VZ), Barclays PLC (NYSE:BCS), Microsoft Corporation (NASDAQ:MSFT), Unilever PLC (NYSE:UL), and Royal Dutch Shell plc (NYSE:RDS-A). These companies have the resources to invest in EVs for transportation and deliveries, since electric vehicles play a significant role in the ambitious objective of zero emission targets.
Not only electric cars for personal use are trending, but companies are shifting towards electric trucks for deliveries, and demand for electric bikes and scooters more than doubled in 2020, with majority of the customers belonging to the US, China, and Europe.
As the trend for electric vehicles becomes a common phenomenon, all major companies in the EV ecosystem will see a boost in demand. Companies offering charging stations, batteries, semiconductors, and other relevant products and services are set to see a spike in operations. Bloomberg stated in a November 24 story that the electric vehicle space is expected to deliver IPOs valued at approximately $100 billion by the end of 2023. As the EV space gains more recognition, hedge funds are increasing their stakes in these companies.
The most popular EV stocks among famous hedge funds include Plug Power Inc. (NASDAQ:PLUG), Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and QuantumScape Corporation (NYSE:QS), among others discussed in detail below.
Our Methodology
We chose the 10 best EV stocks that are most sought after by hedge funds and have mostly positive analyst ratings to create this list.
The hedge fund sentiment around each stock was gauged from a total of 867 elite funds tracked by Insider Monkey in Q3 2021.
Most Popular EV Stocks Among Famous Hedge Funds
10. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders: 20
Headquartered in Beijing, China, Li Auto Inc. (NASDAQ:LI) is a manufacturer of premium and smart electric vehicles, making the company an innovator in China’s new energy vehicle market.
In the third quarter of 2021, the smart money increased stakes held in Li Auto Inc. (NASDAQ:LI). 20 hedge funds in the database of elite funds maintained by Insider Monkey were bullish on Li Auto Inc. (NASDAQ:LI), holding stakes worth $468.1 million. This is compared to the same number of funds holding stakes in Li Auto Inc. (NASDAQ:LI) in the preceding quarter, valued at $457.4 million. Josh Resnick’s Jericho Capital Asset Management is one of the leading Li Auto Inc. (NASDAQ:LI) stakeholders from Q3, holding a $122 million position in the company.
Tiger Securities analyst Bo Pei on December 8 initiated coverage of Li Auto Inc. (NASDAQ:LI) with a Buy rating and a $40 price target. The analyst observes that extended-range EVs offer an attractive value proposition to buyers, which should assist Li Auto Inc. (NASDAQ:LI) gain considerable market share.
On November 29, Li Auto Inc. (NASDAQ:LI) posted earnings for Q3. EPS in the period totaled $0.05, beating estimates by $0.04. The $1.22 billion quarterly revenue jumped 220.23% year-over-year, exceeding estimates by $86.37 million.
Just like Plug Power Inc. (NASDAQ:PLUG), Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and QuantumScape Corporation (NYSE:QS), Li Auto Inc. (NASDAQ:LI) is a sought-after EV stock among famous hedge funds.
9. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 20
An American company specializing in hydrogen fuel cell technology to replace traditional batteries in electric vehicles, Plug Power Inc. (NASDAQ:PLUG) is one of the most popular EV stocks among famous hedge funds. Since its inception, Plug Power Inc. (NASDAQ:PLUG) has been using green technology which offers energy gains that help companies realize their sustainability goals.
Plug Power Inc. (NASDAQ:PLUG) reported Q3 earnings on November 9. EPS in the quarter equaled -$0.19, missing estimates by -$0.11. The quarterly revenue came in at $143.92 million, missing estimates by $901,450.
Steve Cohen’s Point72 Asset Management increased its stake in Plug Power Inc. (NASDAQ:PLUG) by 16% in the third quarter, which resulted in the hedge fund owning a position worth almost $19 million in the company. Overall, 20 hedge funds in Q3 reported owning stakes valued at $360.4 million in Plug Power Inc. (NASDAQ:PLUG).
Plug Power Inc. (NASDAQ:PLUG) and Acciona, S.A. (OTC:ACXIF) recently announced that they have finalized the formation of their previously announced 50-50 joint venture. Known as AccionaPlug, the joint-venture is headquartered in Madrid and will execute green hydrogen projects throughout Spain and Portugal.
Plug Power Inc. (NASDAQ:PLUG) completed the acquisition of Applied Cryo Technologies on November 23, a company providing technology, equipment, and services for the transportation, storage, and distribution of liquefied hydrogen and other cryogenic gasses, which will enable Plug Power Inc. (NASDAQ:PLUG) to realize its strategic goal of producing over 1,000 tons of green hydrogen every day by 2028.
Increasing his revenue estimates and stating that Plug Power Inc. (NASDAQ:PLUG) is positioned to capture significant market share in the hydrogen production and electrolyzer businesses, Morgan Stanley analyst Stephen Byrd raised the price target on Plug Power Inc. (NASDAQ:PLUG) to $65 from $43 and kept an Overweight rating on the shares.
8. QuantumScape Corporation (NYSE:QS)
Number of Hedge Fund Holders: 25
QuantumScape Corporation (NYSE:QS), a California-based manufacturer of solid state lithium batteries to be used in electric cars, is one of the most popular EV stocks among famous hedge funds. QuantumScape Corporation (NYSE:QS)’s solid state batteries are positioned to play a significant role in the shift to electric vehicles, according to analysts and market researchers.
QuantumScape Corporation (NYSE:QS) reported its Q3 results on October 26, with EPS in the period amounting to -$0.13, missing estimates by -$0.03. QuantumScape Corporation (NYSE:QS) met its targeted product milestones for 2021, after which JPMorgan analyst Jose Asumendi on November 18 lifted the price target on QuantumScape Corporation (NYSE:QS) shares to $40 from $35 and kept a Neutral rating on the stock. The analyst also reduced his execution discount on the shares from 25% to 17.5%.
Jonathan Soros’ JS Capital is the leading stakeholder of QuantumScape Corporation (NYSE:QS) from Q3 2021, with 2.29 million shares worth $56.3 million. Overall, 25 hedge funds in the third quarter database of Insider Monkey were bullish on QuantumScape Corporation (NYSE:QS), holding total stakes amounting to $197.4 million.
In addition to famous EV names like Plug Power Inc. (NASDAQ:PLUG), Tesla, Inc. (NASDAQ:TSLA) and General Motors Company (NYSE:GM), QuantumScape remained a popular EV stock in 2021.
Here is what Baron Opportunity Fund has to say about QuantumScape Corporation (NYSE:QS) in its Q4 2020 letter:
“QuantumScape Corporation is developing solid-state battery technology for electric vehicles designed to improve key aspects of the battery, including safety, charging times, energy density, and cost. We believe the company’s existing material development and manufacturing techniques can help overcome solid state technological and commercialization hurdles. During the quarter, we participated in the merger between QuantumScape and SPAC Kensington Capital. Shares have since appreciated, driven by investor excitement for the growth opportunities the company may capture with its innovative battery technology.”
7. XPeng Inc. (NYSE:XPEV)
Number of Hedge Fund Holders: 25
On December 6, Morgan Stanley analyst Tim Hsiao classified XPeng Inc. (NYSE:XPEV) as a “Research Tactical Idea”, predicting that the share price will rise in absolute terms over the next 15 days. With a compelling short-term valuation, the analyst believes the dual listing in Hong Kong of XPeng Inc. (NYSE:XPEV) should allow the risk of disrupted operations and lack of funding to be hedged. He stated the company’s fundamentals “remain solid” and kept an Overweight rating on the shares with a HK$275 price target.
XPeng Inc. (NYSE:XPEV), on November 23, announced earnings for the third quarter. EPS in the period totaled -$0.28, beating estimates by $0.06. The quarterly revenue amounted to almost $895 million, increasing 197.34% year-over-year, exceeding estimates by $75 million.
XPeng Inc. (NYSE:XPEV) is a Chinese EV manufacturer from Guangzhou, focused on extensive research and development to create smart electric vehicles since its inception in 2015.
In Q3 2021, 25 hedge funds reported owning stakes in XPeng Inc. (NYSE:XPEV), amounting to $657.1 million. This is compared to 19 funds being bullish on XPeng Inc. (NYSE:XPEV) in the preceding quarter, holding total stakes valued at $784.6 million.
Philippe Laffont’s Coatue Management is the biggest XPeng Inc. (NYSE:XPEV) stakeholder in the third quarter, holding 9.64 million shares worth $342.73 million.
6. Amphenol Corporation (NYSE:APH)
Number of Hedge Fund Holders: 26
Amphenol Corporation (NYSE:APH) is a provider of interconnect solutions such as connectors and cable assemblies for industrial, business, and automotive purposes. The extensive portfolio of power connectors at Amphenol Corporation (NYSE:APH) supports both electric vehicles and EV charging units.
On October 27, Amphenol Corporation (NYSE:APH) announced earnings for Q3, posting an EPS of $0.65, beating estimates by $0.02. The $2.82 billion revenue jumped 21.31% year-over-year, outperforming estimates by $101.56 million.
Truist analyst William Stein on November 19 raised the price target on Amphenol Corporation (NYSE:APH) to $92 from $85 and kept a Buy rating on the shares, stating that the company is following a consistent inorganic growth strategy.
At the end of September, 26 hedge funds were long Amphenol Corporation (NYSE:APH), with total stakes valued at approximately $898 million. Robert Joseph Caruso’s Select Equity Group is the leading Amphenol Corporation (NYSE:APH) stakeholder, with 7.25 million shares amounting to $531.3 million.
In addition to companies like Plug Power Inc. (NASDAQ:PLUG), Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and QuantumScape Corporation (NYSE:QS), Amphenol Corporation (NYSE:APH) is a popular EV stock among famous hedge funds.
Here is what Richie Capital Group has to say about Amphenol Corporation (NYSE:APH) in their Q4 2020 investor letter:
“Amphenol (APH – Up 18.7%) – In December, our high-speed, specialty connector manufacturer announced the acquisition of MTS Systems Corp for $1.7B to enhance their sensor products catalog. Having completed more than a dozen acquisitions since 2016, growth through acquisition is a key tenet of their business strategy and we view this transaction as business as usual. You can read more about our investment thesis for Amphenol here.”
5. Livent Corporation (NYSE:LTHM)
Number of Hedge Fund Holders: 27
For more than 60 years, Livent Corporation (NYSE:LTHM) has been engaged in providing lithium technology that has the potential to change the energy sector. Livent Corporation (NYSE:LTHM) produces energy storage and battery systems, among other related products, using performance lithium compounds that create long-lasting batteries which are an essential part of the EV ecosystem.
On November 4, Livent Corporation (NYSE:LTHM) announced Q3 earnings, posting an EPS of $0.03, missing estimates by -$0.01. The revenue came in at $103.60 million, outperforming estimates by $7.60 million, up 42.70% year-over-year.
Mizuho analyst Christopher Parkinson on November 9 raised the price target on Livent Corporation (NYSE:LTHM) to $31 from $26 and kept a Neutral rating on the shares following the “solid” quarter. According to the analyst, Livent Corporation (NYSE:LTHM) is clearly making progress with improving execution.
Robert Karr’s Joho Capital is one of the leading Livent Corporation (NYSE:LTHM) stakeholders from Q3, increasing its stake in the company by 14%, holding 4.27 million shares worth $98.75 million. Overall, 27 hedge funds in the database of Insider Monkey reported owning stakes worth $277.4 million in Livent Corporation (NYSE:LTHM) in Q3. This is compared to the same number of funds being bullish on the stock in the previous quarter, with stakes valued at $251.1 million.
4. Magna International Inc. (NYSE:MGA)
Number of Hedge Fund Holders: 29
Magna International Inc. (NYSE:MGA) is a Canadian mobility technology company that offers automotive systems like electrified powertrain technologies, components, and assembly modules to clients including General Motors Company (NYSE:GM), Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), Toyota Motor Corporation (NYSE:TM), Tata Motors Limited (NYSE:TTM), BMW, and Volkswagen, among others. This makes Magna International Inc. (NYSE:MGA) one of the most popular and significant EV stocks among famous hedge funds.
Magna International Inc. (NYSE:MGA) announced Q3 results on November 5. EPS in the quarter totaled $0.56, missing estimates by -$0.16. The $7.92 billion revenue exceeded estimates by $66.37 million.
On November 12, Credit Suisse analyst Dan Levy lowered the price target on Magna International Inc. (NYSE:MGA) to $105 from $110 and kept an Outperform rating on the shares. He observed that a shift to EVs is impending in the global auto industry, which very possibly may last into 2024, and Levy feels auto suppliers like Magna International Inc. (NYSE:MGA) have a significant opportunity ahead to capitalize on a favorable cyclical opportunity.
Arrowstreet Capital is the biggest Magna International Inc. (NYSE:MGA) stakeholder from Q3 2021, holding 1.7 million shares worth $128.58 million. Overall, 29 hedge funds reported owning stakes in Magna International Inc. (NYSE:MGA) in the third quarter, valued at $444.70 million.
3. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 30
Of the 30 hedge funds that were bullish on NIO Inc. (NYSE:NIO) in the third quarter, Simon Sadler’s Segantii Capital is one of the leading stakeholders of the company, increasing its stake in NIO Inc. (NYSE:NIO) by 70%, holding 3.57 million shares worth $127.2 million.
NIO Inc. (NYSE:NIO) is a multinational automaker from Shanghai, China, specializing in electric vehicles. In addition to that, NIO Inc. (NYSE:NIO) also offers smart batteries and mobility cloud technology that can detect the needs of users to provide an elevated automobile experience.
On November 9, NIO Inc. (NYSE:NIO) posted its Q3 results, reporting an EPS of -$0.06, missing estimates by -$0.01. The revenue jumped 122.23% on a year-over-year basis to $1.53 billion, outperforming estimates by $62.90 million.
Tiger Securities analyst Bo Pei initiated coverage of NIO Inc. (NYSE:NIO) on December 8 with a Buy rating and a $45 price target. The analyst stated that NIO Inc. (NYSE:NIO) is well positioned to benefit from the global EV trend in the coming decade and “become a major player in the field”.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA) is perhaps the first EV stock that made headlines before the automotive industry caught on to the electric vehicle trend, making Tesla, Inc. (NASDAQ:TSLA) one of the most popular EV stocks among hedge funds. Elon Musk’s Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturer and a clean energy company based in Texas, that also offers storage batteries and solar products.
Cathie Wood’s ARK Investment Management is one of the largest Tesla, Inc. (NASDAQ:TSLA) stakeholders, with the hedge fund owning 3.95 million shares of the company worth over $3 billion. Tesla, Inc. (NASDAQ:TSLA) is the largest stock owned by Cathie Wood in Q3, representing 7.36% of her $41 billion portfolio. Overall, 60 elite funds were bullish on the company in the third quarter, holding total stakes worth $10.64 billion.
On October 20, Tesla, Inc. (NASDAQ:TSLA) disclosed earnings for Q3, posting an EPS of $1.86, beating estimates by $0.25. The $13.76 billion revenue increased 56.85% year-over-year, surpassing estimates by $54.61 million.
UBS analyst Patrick Hummel on December 8 raised the price target on Tesla, Inc. (NASDAQ:TSLA) to $1,000 from $725 but kept a Neutral rating on the shares.
The analyst observed that Tesla, Inc. (NASDAQ:TSLA) will probably continue topping growth and margins consensus expectations in 2022, having a significant advantage in a rapidly accelerating global EV market due to better access to chips and batteries through vertical integration. Tesla, Inc. (NASDAQ:TSLA) also enjoys 20% global BEV market share and industry-leading profitability.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q3 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock contributed as Tesla continued to present strong deliveries growth and a meaningful improvement in profitability despite a complex supply-chain environment. Demand remains robust, new localized manufacturing capacity is expected to support more efficient growth, and the autonomous program is accelerating. We expect Tesla’s growing vehicle offering, battery technology, and energy businesses to drive meaningful growth opportunities.”
1. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 77
General Motors Company (NYSE:GM) is an American multinational automaker that is committed to zero emissions, and is using its Ultium Platform to transform the automobile industry, bringing about an all-electric future. The Ultium Platform will enable General Motors Company (NYSE:GM) to realize its ambition of offering 30 new EVs globally by 2025. General Motors Company (NYSE:GM)’s product portfolio currently includes brands like Chevrolet, Buick, GMC, and Cadillac.
Warren Buffett’s Berkshire Hathaway is the largest General Motors Company (NYSE:GM) stakeholder as of the third quarter, holding 60 million shares of the company, worth $3.16 billion. Overall, 77 hedge funds were bullish on General Motors Company (NYSE:GM) in Q3, with total stakes valued at $6.41 billion.
General Motors Company (NYSE:GM) posted its Q3 earnings on October 27. EPS in the quarter equaled $1.52, beating estimates by $0.55. The $26.78 billion revenue missed analysts’ consensus estimates by $1.10 billion.
On November 15, Wedbush analyst Daniel Ives stated that the General Motors Company (NYSE:GM) EV transformation story heading into 2022 is starting to get recognized. The growing appetite among investors for new innovative EV stories, the vertical integration capabilities of General Motors Company (NYSE:GM), and conversion of its massive customer base to electric vehicles in the coming years represents a transformational opportunity for the company in the near future. The analyst has an Outperform rating and a price target of $85 on General Motors Company (NYSE:GM)’s shares.
Here is what Miller Value Partners has to say about General Motors Company (NYSE:GM) in its Q3 2021 investor letter:
“Another name we’ve recently purchased and have grown incredibly excited about: General Motors (GM). GM is interesting on many levels. We see it as an attractive investment opportunity and it might be a microcosm of current markets, both past and prospective.
Tesla trounced GM over the last decade. Tesla rose 15,797% crushing GM’s 238% increase, which lagged the S&P 500’s 365%. Tesla came out of nowhere creating what many said was the best car ever made. A decade ago, no one saw that coming, including GM. GM’s historical strength led to arrogance. It completely dismissed the threat of any newcomer.
Where are we now? Expectations are entirely different. Tesla’s current price embeds 18 years of growth while GM embeds under one year (see a pattern in what we like?!). Tesla’s expectations look even loftier when you consider that in that 18th year, Tesla would be projected to earn $1.35 trillion revenues at very high, Ferrari-type margins. The largest automakers today generate roughly $250 billion revenues at less than half those margins.
Tesla’s priced to go where no man (or woman!) has gone before. It’s impossible for Tesla to meet these expectations with auto manufacturing alone. It requires something more. Bulls believe Tesla can dominate an autonomous driving future and make significant money on software subscriptions. We don’t have a view on this other than that Tesla needs to do so to be attractive at the current price.
Market expectations for GM, on the other hand, are muted. There appears to be no innovation or growth priced into the stock. Yet GM plans to launch 30 EV (electric vehicles) models globally by 2025 (Tesla has launched a total of 4). GM’s new electric vehicles, like the Hummer and Cadillac Lyric, are extremely impressive. It’s revamping its manufacturing production to be modular, allowing greater speed and adaptability. The entire culture has transformed from a stodgy, bureaucratic old manufacturer to a speedier, more innovative software-enabled automaker. GM currently employs 25,000 software engineers.
GM believes it can double revenues by 2030, and improve margins through software and services. GM currently earns $2 billion of high margin software and services revenue, which is more than Tesla. Cruise, GM’s majority owned autonomous company, recently detailed why it sees the potential for $50B in revenues within 6-8 years of its 2023 launch of the Origin vehicle. BrightDrop, its autonomous commercial vehicle unit, looks promising as well with the potential for $10 billion in revenues. We don’t think this optionality is reflected in the current price. Investors started to see the potential after GM’s recently analyst day. We can easily get values for GM more than double its current price of $58.
The contrast between GM and Tesla illustrates what we see more broadly in the market, which is why we see more opportunity in classic value names than in the secular growth names. After a decade of dominance, expectations for innovative and disruptive companies are quite high. Many classic value companies were caught flat-footed, but have invested heavily to catch up. Muted expectations don’t reflect their improved prospects.”
You can also take a look at 10 Remote Work Stocks to Buy Now and 10 Dividend Stocks That Have Doubled Their Payouts.
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Disclosure: None. 10 Most Popular EV Stocks Among Famous Hedge Funds is originally published on Insider Monkey.
