In this article, we will be taking a look at the 11 best electric vehicle stocks to buy now.
With a rapid shift in focus to renewable energy and sustainable use of energy resources, electric vehicles (EVs) have become more popular over recent years. At first, only new companies like Elon Musk’s Tesla, Inc. (NASDAQ:TSLA) were embarking on the challenge to produce EVs, but as the years progressed, many other similar companies have popped up across the world. According to the International Energy Agency’s Global EV Outlook 2022, as of this May, the EV sector grew to the point where global sales of EVs rose to 2 million in the first quarter alone. This represented a 75% increase compared to the first quarter of 2021.
Now, even conventional automobile manufacturing companies such as Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have begun to develop EVs. The growth of the EV sector has also resulted in large amounts of funds being poured into it. According to Bloomberg, over $4.8 billion was poured into the EV charging industry as of August 2022. About $650 million were invested into the sector by Blackrock, Daimler Truck, and NextEra Energy Resources in the US.
It was also estimated that more than 73% of the investment going into the EV and EV charging sectors in 2021 went into ultra-fast charging, according to BloombergNEF. The strong investment trend in the EV-charging sector can be attributed to the growth in the electric vehicle sector as a whole, and in light of more government funds being allotted to the production and sale of EVs.
Our Methodology
We have selected EV stocks with high growth potential. The stocks also have positive analyst ratings and price targets signifying upside potential. They are among the most popular stocks with hedge funds in the second quarter, when Insider Monkey tracked 895 hedge funds. The stocks are ranked on the basis of the number of hedge funds holding stakes in them, from the lowest to the highest.
Best Electric Vehicle Stocks to Buy Now
11. Fisker Inc. (NYSE:FSR)
Number of Hedge Fund Holders: 11
Fisker Inc. (NYSE:FSR) is an automobile manufacturing company that develops and sells electric vehicles primarily. The company operates through its The White Space, The Value Segment, and The Conservative Premium segments. It provides the Fisker flexible platform agnostic design, which develops and designs EVs in specific segment size.
On August 5, Morgan Stanley’s Adam Jonas placed an Equal Weight rating on Fisker Inc. (NYSE:FSR) shares.
In the second quarter of 2022, Fisker Inc. (NYSE:FSR) had an EPS of -$0.4, beating estimates by $0.04. The company’s revenue growth year over year stands at 61.2%. This August, Fisker Inc. (NYSE:FSR) announced that it is considering increasing production for its EV Fisker Ocean, in late 2023. The decision is being influenced by the rising demand for the company’s SUVs.
There were 11 hedge funds long Fisker Inc. (NYSE:FSR) in the second quarter. Their total stake value was $110 million.
Fisker Inc. (NYSE:FSR) is a promising stock in the EV sector and is gaining popularity fast. It is joining the ranks of stocks like Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and General Motors Company (NYSE:GM).
10. Lucid Group Inc. (NASDAQ:LCID)
Number of Hedge Fund Holders: 16
Lucid Group Inc. (NASDAQ:LCID) is a tech and automotive company focused on developing electric vehicle technologies. The company builds EVs, EV powertrains, and battery systems. It operated about 20 retail studios in the US as of December 2021.
A Buy rating was reiterated on shares of Lucid Group Inc. (NASDAQ:LCID) on August 4, by Itay Michaeli, an analyst at Citigroup. The analyst also placed a $28 price target on the stock.
This August, Lucid Group Inc. (NASDAQ:LCID) reported robust demand for its product, the Lucid Air EV. The company hosts a reservation count of over 37,000 for Lucid Air, representing potential sales of about $3.5 billion. The company also ended the second quarter with $4.6 billion in cash, a figure Lucid Group Inc. (NASDAQ:LCID) has stated it sufficient for funding the company into 2023.
Out of 895 hedge funds, 16 hedge funds were long Lucid Group Inc. (NASDAQ:LCID) in the second quarter, compared to 16 hedge funds in the previous quarter as well. Their total stake values were $173 million and $159 million respectively.
9. Canoo Inc. (NASDAQ:GOEV)
Number of Hedge Fund Holders: 20
Canoo Inc. (NASDAQ:GOEV) is a mobility technology company focused on developing EVs for commercial and consumer markets in the US. The company provides lifestyle delivery vehicles, lifestyle vehicles, multi-purpose delivery vehicles, and pickups. It serves small businesses, independent contractors, tradespeople, utilities, and service technicians.
Jaime Perez, and analyst at R.F. Lafferty, holds a Buy rating on Canoo Inc. (NASDAQ:GOEV) shares as of August 9. The analyst also placed a $15 price target on the stock.
This August, Tony Aquila, the CEO of Canoo Inc. (NASDAQ:GOEV), acquired about 200,000 shares in the company at an average price of $3.99. Aquila held about 51.2 million shares in the company as of August 12, and his recent share purchases resulted in Canoo Inc. (NASDAQ:GOEV) share prices surging by 13.4%.
Ionic Capital Management was the largest stakeholder in Canoo Inc. (NASDAQ:GOEV) in the second quarter, out of 20 hedge funds in total long the stock. Bart Baum’s fund held 1,079,100 shares in the company, worth nearly $2 million out of the total stake value of $7.2 million.
8. XPeng Inc. (NYSE:XPEV)
Number of Hedge Fund Holders: 24
XPeng Inc. (NYSE:XPEV) is a designer and developer of smart EVs in China. The company provides SUVs under the G3 and G3i names, alongside four-door sports sedans under the P7 name and family sedans under the P5 name. It also offers sales contracts and maintenance, super charging, and vehicle leasing services, among more.
Jeff Chung at Citigroup holds a Buy rating on XPeng Inc. (NYSE:XPEV) shares as of August 27. The analyst also placed a $27.8 price target on the stock.
On August 1, Morgan Stanley’s Tim Hsiao noted that XPeng Inc.’s (NYSE:XPEV) July delivery of 11,524 units grew 43% year over year. The July sales volume proved to be better than market expectations, and the company’s performance thus led the analyst to reiterate an Overweight rating and $41 price target on XPeng Inc. (NYSE:XPEV) shares.
Our hedge fund data shows 24 hedge funds long XPeng Inc. (NYSE:XPEV) in the second quarter, with a total stake value of $618 million. In comparison, 26 hedge funds were long the stock in the previous quarter, with a total stake value of $783 million.
7. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 25
NIO Inc. (NYSE:NIO) is a Chinese EV manufacturer offering five, six, and seven-seater electric SUVs. The company also provides smart electric sedans and energy and service packages to its customers. It offers power solutions such as the Power Home, a home charging solution, and the Power Swap, a battery swapping service.
Deutsche Bank’s Edison Yu holds a Buy rating on NIO Inc. (NYSE:NIO) shares as of August 27. The analyst also placed a $45 price target on the stock.
This July, as production of EVs increased, shares of NIO Inc. (NYSE:NIO) also jumped by 8%. On July 1, the company also reported that its June deliveries had increased by about 60% compared to the same period a year ago.
As of the close of the second quarter, 25 hedge funds were long NIO Inc. (NYSE:NIO), with a total stake value of $873 million. Renaissance Technologies was the largest stakeholder in the company, holding 17,768,900 shares worth $385.9 million.
Horos Asset Management, an investment management firm, mentioned NIO Inc. (NYSE:NIO) in its first quarter 2022 investor letter. Here’s what they said:
“At the beginning of April the CSRC (China Securities Regulatory Commission) announced possible changes in its regulation that would allow this inspection by foreign auditors, provided that the companies previously communicate to this body the state secrets that would be exposed, as well as the sensitive information that they might have to hand over, and the subsequent audit is carried out in a framework of collaboration with the CSRC. In short, a move in the direction desired by the SEC, although still far from the optimal result, that is, unrestricted access to information. While these negotiations between the two regulatory bodies are progressing, Chinese companies have to decide how best to preserve their interests. Other entities, such as the electric vehicle manufacturer Nio, have just started trading on this stock market.”
6. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders: 28
Li Auto Inc. (NASDAQ:LI) is another Chinese manufacturer of new energy vehicles. The company offers Li ONE, a six-seat smart electric sport utility vehicle, and sales and after sales management services. It also provides technology development and corporate management services.
CLSA analyst Aaron Li initiated coverage of Li Auto Inc. (NASDAQ:LI) shares on August 8 with a Buy rating.
The company’s second quarter EPS was -$0.03, beating estimates by $0.02. Its revenue of $1.3 billion was up 65.5% year over year. Li Auto Inc.’s (NASDAQ:LI) EPS is expected to grow by 87.8% over the next three to five years as well.
Li Auto Inc. (NASDAQ:LI) had 28 hedge funds long its stock in the second quarter, compared to 28 hedge funds in the previous quarter as well. Their total stake values were $1.4 billion and $1.3 billion respectively.
5. Ferrari N.V. (NYSE:RACE)
Number of Hedge Fund Holders: 33
Ferrari N.V. (NYSE:RACE) is a conventional automobile manufacturer planning to delve into the EV sector by 2025, as announced this July. The company expects to have 40% EV sales by 2030. Currently, it engineers and produces luxury performance sports cars.
An Outperform rating was reiterated on Ferrari N.V. (NYSE:RACE) shares on August 4, by analyst Tom Narayan at RBC Capital.
As of the close of the second quarter, Ferrari N.V. (NYSE:RACE) had an EPS of $1.4, beating estimates by $0.1. The company’s revenue was $1.3 billion, also beating estimates by $62.5 million. Over the next three to five years, Ferrari N.V. (NYSE:RACE) expects its EPS to rise by 11.5%, and it currently holds a one-year dividend growth rate of 57.1%.
Out of 895 hedge funds tracked in the second quarter. 33 hedge funds were long Ferrari N.V. (NYSE:RACE). Their total stake value was $870 million.
Ensemble Capital, an investment management firm, mentioned Ferrari N.V. (NYSE:RACE) in its first quarter 2022 investor letter. Here’s what they said:
“Ferrari (7.3% weight in the Fund): As WE DESCRIBED a year ago in this letter, Ferrari’s chief marketing officer’s hardest job is not getting people to buy a Ferrari, but to tell some of them no. The company is in the business of selling rare, luxury products and so by design they greatly limited the number of vehicles they sell. This extreme constraint has led to a wait list of well over a year with a customer base so devoted to the company that even in the midst of the Financial Crisis of 2008-09, the number of vehicles they sold only declined by 4%. Their customers are so price insensitive, that the company often sells out of their limited edition super cars that sell for millions of dollars before they even announce the price. For a Ferrari collector the high prices are a feature, not a bug, as it is the price that makes Ferrari ownership so exclusive.”
4. Rivian Automotive Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 35
Rivian Automotive Inc. (NASDAQ:RIVN) is a manufacturer of EVs and accessories. The company provides five-passenger pickup trucks and sports utility vehicles.
Morgan Stanley’s Adam Jonas holds an Overweight rating on Rivian Automotive Inc. (NASDAQ:RIVN) shares as of August 12. The analyst also holds a $60 price target on the stock.
This August, Rivian Automotive Inc. (NASDAQ:RIVN) shares climbed over 90% from their 52-week low. Big name investors like Ray Dalio and David Einhorn have also increased their stakes in the company, making it an attractive EV stock.
There were 35 hedge funds long Rivian Automotive Inc. (NASDAQ:RIVN) in the second quarter, compared to 29 hedge funds in the previous quarter. Their total stake values were $1.6 billion and $3.9 billion, respectively.
3. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 46
Ford Motor Company (NYSE:F) is an automobile manufacturer providing Ford trucks, cars, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles. The company operates through its Automotive, Mobility, and Ford Credit segments.
A Buy rating was reiterated on Ford Motor Company (NYSE:F) shares by Michael Ward, an analyst at Benchmark, on August 1. The analyst also placed a $23 price target on the stock.
Ford Motor Company (NYSE:F) had an EPS of $0.7 in the second quarter, beating estimates by $0.2. The company’s revenue was $37.9 billion, also beating estimates by $2.7 billion. Ford Motor Company’s (NYSE:F) EPS is expected to grow by 52% over the next three to five years.
Ford Motor Company (NYSE:F) had 46 hedge funds long its stock in the second quarter. Their total stake value was $608.8 million.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) is Elon Musk’s EV manufacturing company. The company also provides energy generation and storage systems in the US, China, and internationally.
Philippe Houchois at Jefferies reiterated a Buy rating on Tesla, Inc. (NASDAQ:TSLA) shares on August 27. The analyst also placed a $350 price target on the stock.
This August, Tesla, Inc. (NASDAQ:TSLA) moved forward with a 3:1 stock split to make the company’s shares more affordable. The stock gained by almost 2% and moved higher to about $302.3 when it began trading at the new price. Tesla, Inc.’s (NASDAQ:TSLA) EPS also represent growth potential, as it is expected to grow by 44.6% over the next three to five years.
Our hedge fund data shows 72 hedge funds long Tesla, Inc. (NASDAQ:TSLA) in the second quarter, with a total stake value of $7.2 billion. In comparison, 80 hedge funds were long the stock in the previous quarter, with a total stake value of $11.3 billion.
Baron Funds, an asset management firm, mentioned Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2022 investor letter. Here’s what they said:
“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:
- First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;
- second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.
Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful.
Regardless, I was right to have spoken with Roger. That was since he outlined numerous issues we needed to consider, study, and question before we determined whether we believed Tesla could be a successful business…before we ultimately chose whether to invest in that company.
When we completed our initial due diligence on Tesla, which diligence has been ongoing since 2014, we decided to invest $360 million in Tesla over the next two years. I then called Roger and outlined why I thought we could earn 20 times our capital over the next 10 years. Roger was so certain I was wrong that he offered to bet me $1 million that Tesla would fail. “Roger, I can’t bet you a million dollars. First, if you are right, I couldn’t afford to pay you. Second, if I’m right, you’re my friend, and I couldn’t take your money.” We settled on a dinner bet…”
1. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 75
General Motors Company (NYSE:GM) is another conventional automobile manufacturer that has begun manufacturing EVs such as the Chevrolet Bolt EV and the Bolt EUV. The company otherwise sells trucks, crossovers, cars, and automobile parts and accessories.
A Buy rating was kept on General Motors Company (NYSE:GM) shares on July 27, by analyst Michael Ward at Benchmark. Ward also placed a $60 price target on the stock.
This August, General Motors Company (NYSE:GM) reinstated its quarterly dividend at $0.09 per share. It also increased the company’s share buyback capacity to $5 billion of common stock, compared to the $3.3 billion figure previously set.
As of the close of the second quarter, 75 hedge funds were long General Motors Company (NYSE:GM). Their total stake value was $3.4 billion.
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Disclosure: None. 11 Best Electric Vehicle Stocks to Buy Now is originally published on Insider Monkey.
