In this article, we discuss the 10 most popular EV stocks among famous hedge funds. If you want to skip our detailed analysis of the EV market, go directly to 5 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.”
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Disclosure: None. 10 Most Popular EV Stocks Among Famous Hedge Funds is originally published on Insider Monkey.
