12 Best EV Stocks to Buy Now

In this article, we discuss the 12 best EV stocks to buy now.

Countries around the world are pushing policies to fight climate change and reduce greenhouse gas emissions. Under the Inflation Reduction Act, the US government has introduced a $4,000 tax credit for customers who buy used electric vehicles (EVs). This provision will be implemented from January 1, 2023. Furthermore, the government has extended a tax credit of $7,500 on new EVs and will remove the  200,000-unit-per-manufacturer sales cap from January 1 next year. These actions are intended to encourage the use of EVs, playing in favor of the leading EV companies. Meanwhile, under the US infrastructure bill introduced last year, the US government has granted $5 billion to states to develop their EV charging network. The lack of presence of EV charging stations has been a major cause for EV owners not to go on long routes on the highways.

According to a report issued by Climate Action Tracker, EV sales now account for more than 5% of new car sales in the US as of Q1 2022. However, EVs need to make up 75% – 95% of the global yearly vehicle sales to have a meaningful positive impact on the environment. Such a trend reflects that there is massive growth potential in the EV segment as leading automobile companies in the world are shifting their focus on enhancing EV manufacturing technologies to become a part of the electric revolution. EV sales observed an increase of 160% YoY in 2021 and are expected to experience exponential growth this year as well. If the EV transition trend continues aggressively in the US, almost one-fourth of new car sales might be EVs by 2025, outpacing projections by two years. Tesla, Inc. (NASDAQ:TSLA), Rivian Automotive, Inc. (NASDAQ:RIVN), and NIO Inc. (NYSE:NIO) are among some of the leading companies capitalizing on the surge in demand.

Our Methodology

We have shortlisted companies that are involved at various stages of the EV value chain. These companies are experiencing strong demand for products and services offered in the EV industry. Furthermore, all these stocks are trading at a significant discount as compared to their all-time highs due to macroeconomic uncertainty. This provides an attractive opportunity for investors to go long on these stocks. These stocks have been ranked according to the level of hedge fund ownership as of Q2 2022.

Best EV Stocks to Buy Now

12. Blink Charging Co. (NASDAQ:BLNK)

Number of Hedge Fund Holders: 7

Blink Charging Co. (NASDAQ:BLNK) is a Miami Beach, Florida-based EV charging company.

Blink Charging Co. anticipates global EV sales to rise to 10 million by 2025 and then to 30 million by 2030. This would be equivalent to 28% of the global market. The acquisition of SemaConnect for $200 million will aid Blink Charging Co. in enhancing its manufacturing abilities and expanding its charging network. This is expected to boost Blink Charging Co.’s revenue through the company’s 12,800 active charging points and with over 151,000 registered users.

The market share of EVs increased to 6% of the light-vehicle market in August 2022, as opposed to only 3.3% during the same month last year. Meanwhile, similar trends were observed in other leading developed countries like China and France. Under the Infrastructure Bill, Blink Charging Co. has received $32 million in grants.

11. Lordstown Motors Corp. (NASDAQ:RIDE)

Number of Hedge Fund Holders: 7

Lordstown Motors Corp. (NASDAQ:RIDE) is a Lordstown, Ohio-based designer and manufacturer of EVs. The company has a production capability of 400,000 thousand vehicles annually on its 6.2 million square feet manufacturing facility.

The all-electric Endurance Pickup is the flagship model of the EV company. Some experts believe that investing in Lordstown Motors Corp. right now is like investing in Tesla around a decade ago. Lordstown Motors Corp. could be a multibagger stock in the coming years, making it one of the best EV stocks to buy now. To overcome challenges related to capital and liquidity, Lordstown Motors Corp. has reached an agreement with Foxconn that will secure the funding for mass production capabilities. Lordstown Motors Corp. is expected to sell 2,500 Endurance pickups in 2023, 10,000 units in 2024, and 80,000 units by the end of the decade.

10. Proterra Inc. (NASDAQ:PTRA)

Number of Hedge Fund Holders: 8

Proterra Inc. (NASDAQ:PTRA) is a Burlingame, California-based EV company with a focus on commercial vehicles like buses, coach buses, delivery trucks, and shuttles.

As metropolitans are shifting their public vehicle fleet to EVs, Proterra Inc. has become a widely known entity in this arena. The company has sold over 1,300 electric buses to more than 135 transit authorities spread across 43 US states and Canadian provinces.

Jordan Levy at Truist initiated coverage on Proterra Inc. (NASDAQ:PTRA stock with a Buy rating and a target price of $9 in a research note issued to investors on September 28. The analyst believes that Proterra Inc. is creating its niche in the specialized electrification and specialized battery technologies segment for a wide variety of all-electric commercial vehicles.

Proterra Inc. was held by 8 hedge funds at the end of Q2 2022.

9. Workhorse Group Inc. (NASDAQ:WKHS)

Number of Hedge Fund Holders: 10

Workhorse Group Inc. (NASDAQ:WKHS) is a Sharonville, Ohio-based maker of electric last-mile delivery vehicles that have a range of 100 miles. The company is also involved in the production of delivery drones. Both of these are emerging trends that have led us to categorize Workhorse Group Inc. as one of the best EV stocks to invest in.

Experts believe that the balance sheet of Workhorse Group has “room for execution.” Workhorse Group Inc. has received the first batch of new chassis from GreenPower Motor Company Inc. (NYSE:GP), which will enhance the company’s production capabilities. Workhorse Group Inc. is operating in a growing segment as companies like FedEx Corporation (NYSE:FDX) intend to fully electrify their delivery truck fleets by 2040. The company has also addressed the concerns highlighted by the Federal Motor Vehicle Safety Standards (FMVSS) regarding its C1000 vehicles.

As of Q2 2022, D E Shaw held a stake of over $1.7 million in Workhorse Group Inc..

8. Fisker Inc. (NYSE:FSR)

Number of Hedge Fund Holders: 11

Fisker Inc. (NYSE:FSR) is a Manhattan Beach, California-based designer, and manufacturer of the all-electric SUV Fisker Ocean.

On September 14, Vikram Bagri at Needham started coverage on Fisker Inc. stock with a Buy rating and a target price of $12. The target price reflects a potential upside of over 58% from the closing price as of September 30. The analyst believes that the Fisker Ocean SUV provides consumers with advanced technology at an affordable price. Bagri also shared that Fisker Inc. is trying to save on exuberant capital outlay related to manufacturing facilities. The company is outsourcing production through agreements with reputable companies. For instance, the Fisker Ocean SUV will be manufactured by Magna International Inc. (NYSE:MGA), which is the fourth biggest parts supplier in the automobile industry.

Fisker Inc. was held by 11 hedge funds at the end of the second quarter of 2022.

7. Lucid Group, Inc. (NASDAQ:LCID)

Number of Hedge Fund Holders: 16

Lucid Group, Inc. (NASDAQ:LCID) is a Newark, California-based EV company.

Lucid Group, Inc. has selected a 500-acre property in Casa Grande, Arizona, for its first EV factory. The facility will have an initial production capacity of 10,000 EVs annually, which will increase to 300,000 EVs per year through planned expansions.

On September 27, Andres Sheppard at Cantor Fitzgerald started coverage on Lucid Group, Inc. stock with an Overweight rating and a target price of $23. The target price reflects a potential upside of over 93% from the closing price as of September 30. Sheppard believes that the luxury vehicles offered by Lucid Group, Inc. are very efficient, with a longer driving range and faster-charging abilities.

6. ChargePoint Holdings, Inc. (NYSE:CHPT)

Number of Hedge Fund Holders: 17

ChargePoint Holdings, Inc. (NYSE:CHPT) is a Campbell, California-based operator of the world’s biggest EV charging network and a provider of integrated solutions of hardware and cloud services for businesses and drivers.

Given its attractive valuation, Maheep Mandloi at Credit Suisse initiated coverage on ChargePoint Holdings, Inc. stock with an Outperform rating and a target price of $22 on September 7. The analyst has a positive outlook on ChargePoint Holdings, Inc. stock as the company is in a position to benefit from its “capital-light growth model.” Furthermore, ChargePoint Holdings, Inc.’s first-mover advantage in the integrated solutions market makes it one of the best EV stocks to invest in.

Mandloi has termed ChargePoint Holdings, Inc. stock as a winner due to the positives of the Inflation Reduction Act (IRA). The IRA has allocated $7.5 billion for the expansion of alternative fuel infrastructure and EV charging stations across the US.

In addition to ChargePoint Holdings, Inc., Tesla, Inc., Rivian Automotive, Inc., and NIO Inc. are also on our list of the 12 best EV stocks to buy now.

5. XPeng Inc. (NYSE:XPEV)

Number of Hedge Fund Holders: 24

XPeng Inc. (NYSE:XPEV) is a Guangzhou, China-based EV company that is addressing the needs of the Chinese tech-savvy and middle-class consumers in the biggest EV market in the world.

XPeng Inc. is also working on enhancing the driving experience by offering its proprietary advanced driver assistance system and in-car intelligent operating system. On September 22, Tim Hsaio at Morgan Stanley gave an Overweight rating on XPeng Inc. stock with a target price of $41. The company recently revealed its fourth production model in the form of a G9 Flagship SUV that is expected to surpass the current production volume of the P7. The analyst cites the increase in benchmark interest rates by the Federal Reserve as one of the reasons for the correction in XPeng Inc.’s stock price. This provides an attractive opportunity for investors to go long on one of the best EV stocks in the market.

Renaissance Technologies raised its stake in XPeng Inc. by 257% during Q2 2022.

4. NIO Inc. (NYSE:NIO)

Number of Hedge Fund Holders: 25

NIO Inc. is a Shanghai, China-based EV company operating in the Sedan and SUV category through its various offerings.

In August, Edison Yu at Deutsche Bank highlighted two factors that are expected to make NIO Inc. outperform its competitors in the EV startup segment. The first factor is the initial positive response that NIO Inc.’s mid-size Sedan ET5 received from customers. The company can address this strong demand for its top-selling premium model by leveraging its new production facilities.

The second factor is the stable demand for NIO Inc.’s present offerings which are more expensive than competitors. This reflects that the company has pricing power, and the customer is more focused on the brand than the features offered. The analyst gave NIO Inc. stock a Buy rating with a $39 price target in late August.

Here’s what Horos Asset Management said about NIO Inc. in its Q1 2022 investor letter:

“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.”

3. Li Auto Inc. (NASDAQ:LI)

Number of Hedge Fund Holders: 28

Li Auto Inc. (NASDAQ:LI) is a Beijing, China-based EV company. The company is at the third position on our list of the 12 best EV stocks to buy now.

Li Auto Inc. introduced its SUV offering Li L7 and Li L8 on September 30. The Li L8 is a six-seater all-electric SUV that will compete against the leading all-electric SUV of European auto companies operating in the Chinese market. Paul Gong at UBS believes that the EV adoption rate in China will rise to 30% in the months ahead, which could result in the annual deliveries of EVs surpassing the six million level by the end of 2022, doubling from last year’s level. Li Auto Inc. delivered 11,531 vehicles in September 2022. The Swiss financial services firm UBS thinks that 60% of all automobiles in China will be electric by the end of this decade.

Tiger Global Management LLC was the leading hedge fund investor in Li Auto Inc. during Q2 2022.

2. Rivian Automotive, Inc. (NASDAQ:RIVN)

Number of Hedge Fund Holders: 35

Rivian Automotive, Inc. is a California-based EV company that is making a place in the EV market through its all-electric SUV R1S and electric truck R1T.

On September 28, Jordan Levy at Truist initiated coverage on Rivian Automotive, Inc. stock with a Buy rating and a target price of $65, reflecting a potential upside of over 97% from the closing price as of September 30. The analyst believes that investors will soon see Rivian Automotive, Inc. as a “next generation diversified tech powerhouse.” Furthermore, the strategic partnership with Amazon.com, Inc. (NASDAQ:AMZN) gives an edge to Rivian Automotive, Inc. as compared to other original equipment manufacturers (OEMs) in the commercial market. The company’s competitive edge makes it one of the best EV stocks to buy currently.

Here’s what Baron Funds said about Rivian Automotive, Inc. in its Q2 2022 investor letter:

“Rivian Automotive, Inc. designs, manufactures, and sells consumer and commercial electric vehicles. Shares of Rivian declined 48.2% in the second quarter as investors continued rotating out of long-duration assets and have become increasingly concerned about capital intensity and cash burn.

At the same time, Rivian continues to be impacted by supply chain issues which are causing delays in its production ramp. Rivian is addressing those challenges by diversifying its supply chain to alleviate shortages while also consolidating the number of variants in development to reduce cash burn (the company guided that current cash will be enough to support the company’s future platform launch ‘R2’ in 2025). Rivian recently reported stronger-than-expected second quarter production numbers while reiterating its annual guidance of producing 25,000 units.

As semiconductor shortages ease, we believe that the company will be able to rapidly ramp its production. We retain conviction in the shares given management’s vision, Rivian’s product positioning, the company’s relationship with Amazon.com, and its strong balance sheet. As of the end of the first quarter, Rivian had $17 billion of cash and cash equivalents, which will help it overcome the current challenges while taking advantage of the long-term opportunity as the market transitions to electric vehicles.”

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 72

Tesla, Inc. is a Texas-based company that has established a leadership position in the EV market under the guidance of its founder and CEO, Elon Musk.

Tesla, Inc. anticipates a substantial increase in the production of its fully electric SUV Model Y and Model 3 during Q4 2022 and intends to capitalize on this growth next year as well. The company aims to reach the annual production levels of German luxury auto manufacturer BMW. Tesla, Inc. is anticipating total production of 1.59 million Model Y and Model 3 vehicles during the first quarter of 2023. Despite the recent macroeconomic uncertainty causing a slump in the stock price of Tesla, Inc., it is still in the green on a YoY basis, making it one of the best EV stocks in the market.

Baron Funds Shared its outlook on Tesla, Inc. in its Q2 2022 investor letter. Here’s what the firm 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:

1. First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;
2. 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…” (Click here to see the full text)

You can also take a peek at 10 Best Clothing Stocks To Invest In and Best Chinese Stocks To Buy.

Follow Insider Monkey on Twitter

Suggested Articles:

• Best Medical Technology Stocks To Buy
• 10 Best Telecom Stocks To Buy Now
• 10 Best Cheap Dividend Stocks To Buy

This article is originally published at Insider Monkey.