In this article, we discuss the 5 best EV startups to watch. If you want to read our detailed analysis of these startups, go directly to the 10 Best EV Startups to Watch.
5. Sila Nanotechnologies
Silla Nanotechnologies is a company that concentrates on the development and marketing of high energy density batteries used in electronic devices and vehicles around the world. The firm has raised more than $870 million in funding so far over 4 rounds, with the latest round earlier in January bringing in more than $590 million. Some of the lead investors in the startup include Coatue Investment and Canada Pension Plan Investment Board, among others. The firm is based in California and was founded in 2011.
Another battery storage stock to look out for is Proterra Inc. (NASDAQ: PTRA), the automotive firm that develops and sells electric transit buses and different types of electric charging systems. Proterra Inc. (NASDAQ: PTRA) posted more than $123 million in revenue in 2018, which increased almost 50% to $181 million the next year.
4. Lucid Motors
Lucid Motors is an auto manufacturer with a focus on electric vehicles. The firm has so far raised more than $1.3 billion in funding over five rounds, with the latest round in April bringing in close to $200 million. Some of the lead investors in the firm include Saudi Arabia’s Public Investment Fund and China’s Environmental Fund, among others. The company is planning to go public soon and has merged with Churchill Capital Corp IV for the purpose. The EV company is valued at over $50 billion.
If the valuation is right, the company will have a market cap greater than XPeng Inc. (NYSE: XPEV), the Chinese EV firm that has captured investor interest in the past year with strong delivery and revenue numbers. On June 1, XPeng Inc. (NYSE: XPEV) announced that it had delivered more than 5,600 smart EVs in May, an increase of 483% year-on-year.
At the end of the first quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $976 million in XPeng Inc. (NYSE: XPEV), down from 30 in the preceding quarter worth $820 million.
3. Faraday Future
Faraday Future is a Los Angeles-based design and technology company that focuses on electric vehicles. It has managed to raise more than $2.4 billion in funding over six rounds, with the latest round in March bringing in more than $100 million. The lead investors in the startup include Ares Management, Birch Lake Partners, and others. Faraday is also planning a debut on the market sometime this year, and will merge with Property Solutions Acquisition Corp, with the combined entity valued at over $3.4 billion.
As the EV space becomes saturated, it is important to separate the good stocks from the bad. Nikola Corporation (NASDAQ: NKLA), the firm that aims to sell electric and hydrogen-electric vehicles, is a solid bet in the EV sector for the coming months. On May 28, investment advisory BTIG gave Nikola Corporation (NASDAQ: NKLA) stock a Buy rating with a price target of $18, calling the stock a future market disruptor.
Out of the hedge funds being tracked by Insider Monkey, San Francisco-based firm Inclusive Capital is a leading shareholder in Nikola Corporation (NASDAQ: NKLA) with 10.2 million shares worth more than $142 million.
In its Q4 2020 investor letter, Bireme Capital, an asset management firm, highlighted a few stocks and Nikola Corporation (NASDAQ: NKLA) was one of them. Here is what the fund said:
“Nikola Corporation (NKLA) is a poor-man’s facsimile of Tesla. Even the name is a blatant ripo: both are named aer the inventor Nikola Tesla. NKLA is a pre-revenue company founded in 2014 that has yet to bring a product to market, despite the promotion of a dizzying array of concepts:
Nikola Badger: pickup with both fuel-cell and electric variants
Nikola One: fuel-cell commercial semi-truck
Nikola Two: fuel-cell commercial semi-truck
Nikola Tre: electric commercial semi-truck
Nikola NZT: electric four-wheel drive utility vehicle
Nikola Reckless: electric military grade o-highway vehicle
Nikola WAV: electric watersports vehicle
As far as we can tell from their latest investor communications, only the Nikola Tre Commercial semitruck is still in development.
As far as we can tell from their latest investor communications, only the Nikola Tre Commercial semitruck is still in development. NKLA’s history is full of deception and vaporware. They showed a video of the Nikola One in motion; they later admitted that it didn’t work and was just rolling down a hill. NKA’s founder Trevor Milton resigned in disgrace aer Hindenburg Research published a report calling NKLA an “intricate fraud.” NKLA is currently under investigation by both the SEC and DoJ. Partnerships with GM, Republic Services and BP have been canceled. Nevertheless, the company sports an $8b market cap, because “electric vehicles.” Though pretenders are particularly ubiquitous in the bubbly EV industry, pretenders are to be found in many other industries as well.”
2. WM Motor
WM Motor is an auto manufacturer that makes battery-operated electric vehicles. It is based in China and has so far raised close to $5 billion in funding over six rounds, with the latest round held in February. The lead investors in the startup include Shanghai Pudong Development Bank and SAIC Motor, among others. The company has plans to debut on the stock market soon, and has set eyes on the Star Market in Shanghai for the purpose. In April, media reports indicated that some application problems related to the IPO had led to WM Motor pulling out.
Just like WM Motor, another EV maker with explosive growth potential is NIO Inc. (NYSE: NIO), the auto manufacturer based in Shanghai that is called the ‘Tesla of China’ due to the scale of its operations in the country. On June 1, investment advisory Citi upgraded NIO Inc. (NYSE: NIO) stock to Buy from Neutral with a price target of $58.30.
At the end of the first quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in NIO Inc. (NYSE: NIO), down from 34 in the preceding quarter worth $2.6 billion.
In its Q2 2020 investor letter, McLain Capital, an asset management firm, highlighted a few stocks and NIO Inc. (NYSE: NIO) was one of them. Here is what the fund said:
“Nio, Inc. (NIO): It’s stock up 360% since the beginning of June on no news, and one of our more troublesome short positions, the Chinese electric vehicle manufacturer is valued at a whopping $17bln on trailing revenue of only $1.1bln. In 2019, the business ran a -17% gross margin, a -140% EBITDA margin & burned ~$1.5bln in cash in 2019. The stock has become one of the most popular stocks among retail traders with approximately 250,000 accounts holding the name just on the popular Robinhood trading platform.”
1. Rivian
Rivian is an EV maker and technology firm based in California. It is perhaps the most valuable startup in the EV space and has so far raised more than $8 billion in funding over nine rounds, with the latest round in January this year bringing in more than $2.7 billion. The lead investors in the company include T Rowe Price and Soros Fund Management, among others. The company is planning to go public at a valuation of over $70 billion. The firm already sells electric-powered SUVs and trucks, with deliveries expected to begin next month.
Rivian is going to be a direct competitor to Tesla, Inc. (NASDAQ: TSLA), the largest EV firm in the world that has seen share price slump in the past few weeks amid increased competition in the EV market and supply chain problems that have impacted vehicle deliveries. On June 15, investment advisory Mizuho maintained a Buy rating on Tesla, Inc. (NASDAQ: TSLA) stock.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Tesla, Inc. (NASDAQ: TSLA) with 24.4 million shares worth more than $16.3 billion.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ: TSLA) in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
