In this article, we discuss the 10 electric car stocks to buy for 2022.
In 2021, electric vehicle sales surged in China and Europe, with the countries reporting 1.2 million and 1.4 million bookings of EV units, respectively, despite the COVID-19 pressures, representing a change in consumer attitudes towards electrification. To meet the surging demand, many traditional automakers like General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) have also invested heavily to deliver new electrified models, from research and development to factory redesign.
By the end of 2021, EV sales worldwide are expected to reach 5 million units, which represents a 66% growth as compared to 2020, with major markets being China, Europe, and the US. By 2030, 48% of all automobile sales will be attributed to electric vehicles, according to market research.
Political support for electrification has helped the EV market grow in 2021 despite the automotive industry being crippled with supply chain disruption and semiconductor shortages. For instance, in the US, President Joe Biden announced a $174 million stimulus package, committing to support the transition to electric vehicles, consequently investing in charging infrastructure and topping up the federal tax credit. The Biden administration has proposed a new target of reaching 50% electrification by 2030.
With climate change threatening the world we live in, many companies have set a net-zero emissions target, and that has significantly escalated the demand for electric vehicles for transportation of raw materials, delivery of products, and other corporate uses, since companies realize that electric vehicles play a significant role in the monumental objective of zero emission targets.
As more people shift to electric vehicles, all companies in the EV space will benefit from the transition. For example, EV charging stations, battery manufacturers, and semiconductor companies will experience higher demand for their products and services. The EV sector is gaining its due recognition, and is expected to deliver IPOs worth $100 billion by the end of 2023 as new entrants get set to dominate the market.
Copyright: wolandmaster / 123RF Stock Photo
Some of the most popular electric car stocks include Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), Nikola Corporation (NASDAQ:NKLA), and XPeng Inc. (NYSE:XPEV).
Our Methodology
For the best electric car stocks to buy for 2022, we have selected EV manufacturers that had mostly positive analyst ratings, growth potential, and strong company fundamentals. We have ranked these companies according to their popularity among the hedge funds tracked by Insider Monkey in the third quarter.
Electric Car Stocks to Buy for 2022
10. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: N/A
Rivian Automotive, Inc. (NASDAQ:RIVN) is an American electric vehicle manufacturer, founded in California in 2009. After its approximately $12 billion IPO in November 2021, Rivian Automotive, Inc. (NASDAQ:RIVN) is expected to compete with Tesla, Inc. (NASDAQ:TSLA), the current EV market leader.
Rivian Automotive, Inc. (NASDAQ:RIVN), in addition to being an EV automaker, is also creating in-house batteries which will help in production and reduce dependence on market supply chains. Rivian Automotive, Inc. (NASDAQ:RIVN)’s upcoming EV models include an SUV, a pickup truck, and a delivery van, which Rivian Automotive, Inc. (NASDAQ:RIVN) is building as part of an exclusive partnership with Amazon.com, Inc. (NASDAQ:AMZN). The company is also planning to construct its own charging stations across the US and Canada.
Tigress Financial analyst Ivan Feinseth initiated coverage of Rivian Automotive, Inc. (NASDAQ:RIVN) on December 10 with a Buy rating and a $147 price target. According to the analyst, Rivian Automotive, Inc. (NASDAQ:RIVN) has an “innovative and exciting product line” that allows investors good exposure to the ongoing electrification of the global auto industry. Another plus for Rivian Automotive, Inc. (NASDAQ:RIVN) is its partnership with Amazon.com, Inc. (NASDAQ:AMZN), which makes the stock a compelling investment opportunity.
Rivian Automotive, Inc. (NASDAQ:RIVN), valued at over $100 billion, announced on December 10 that it will build a vehicle assembly and battery plant in Georgia to expand operations.
Rivian Automotive, Inc. (NASDAQ:RIVN) is one of the most exciting electric car stocks to buy for 2022, in addition to Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), Nikola Corporation (NASDAQ:NKLA), and XPeng Inc. (NYSE:XPEV).
9. Lordstown Motors Corp. (NASDAQ:RIDE)
Number of Hedge Fund Holders: 12
In the third quarter, billionaire Ken Griffin’s Citadel Investment Group was one of the largest stakeholders of Lordstown Motors Corp. (NASDAQ:RIDE), increasing its stake in the company by 87%, holding 1.34 million shares worth $10.71 million. Overall, 12 hedge funds tracked by Insider Monkey in Q3 were bullish on Lordstown Motors Corp. (NASDAQ:RIDE), with total stakes amounting to $25.92 million.
A $75 million investment in Lordstown Motors Corp. (NASDAQ:RIDE), an American EV automaker, by General Motors Company (NYSE:GM) afforded the company a seat on Lordstown Motors Corp. (NASDAQ:RIDE)’s board, and Lordstown Motors Corp. (NASDAQ:RIDE) became a key supply chain partner of General Motors Company (NYSE:GM). With the backing of General Motors Company (NYSE:GM), Lordstown Motors Corp. (NASDAQ:RIDE) is looking to compete with EV industry leaders like Nikola Corporation (NASDAQ:NKLA), Rivian Automotive, Inc. (NASDAQ:RIVN), and Tesla, Inc. (NASDAQ:TSLA).
The main EV offering of Lordstown Motors Corp. (NASDAQ:RIDE) to date is Endurance, an electric pickup truck, which the company plans to launch by April 2022. In October, Lordstown Motors Corp. (NASDAQ:RIDE) announced that Foxconn Technology Group would become the official assembler of the Endurance EV, and this will allow Lordstown Motors Corp. (NASDAQ:RIDE) quicker time to market.
On November 12, R.F. Lafferty analyst Jamie Perez upgraded Lordstown Motors Corp. (NASDAQ:RIDE) to Hold from Sell with a price target of $7, up from $3. The analyst expects that the Endurance EV will get to production under the company’s new outsourcing model with Foxconn.
Lordstown Motors Corp. (NASDAQ:RIDE), on November 11, reported its Q3 results. The company announced a loss per share of $0.55, beating estimates by $0.03.
8. Canoo Inc. (NASDAQ:GOEV)
Number of Hedge Fund Holders: 13
Canoo Inc. (NASDAQ:GOEV), an Arkansas-based company founded in 2017, is an EV manufacturer that plans to sell an electric minivan by 2022, and the product lineup at Canoo Inc. (NASDAQ:GOEV) includes commercial vehicles for ride sharing and rent-a-car services. Canoo Inc. (NASDAQ:GOEV) is an undervalued company in the EV space that has attractive growth potential, which makes it one of the best electric car stocks to buy for 2022.
Canoo Inc. (NASDAQ:GOEV) reported on November 15 its Q3 results, posting a loss per share of $0.47, in line with analysts’ estimates.
At the end of September, Canoo Inc. (NASDAQ:GOEV) announced a partnership with AVL Technologies to develop, test, and validate Advanced Driver Assistance Systems software for Canoo Inc. (NASDAQ:GOEV)’s Lifestyle Vehicle. The technology will provide a human interface that gives vehicle feedback to notify drivers to make safer choices on the road, and the software will be solely owned by Canoo Inc. (NASDAQ:GOEV).
The third quarter database of Insider Monkey suggests that 13 hedge funds were bullish on Canoo Inc. (NASDAQ:GOEV), with total stakes valued at $10.95 million. D E Shaw recently added Canoo Inc. (NASDAQ:GOEV) to its Q3 portfolio, with 268,162 shares worth more than $2 million.
7. Nikola Corporation (NASDAQ:NKLA)
Number of Hedge Fund Holders: 15
Nikola Corporation (NASDAQ:NKLA) is an electric vehicle manufacturer from Phoenix, Arizona. Nikola Corporation (NASDAQ:NKLA) plans to deliver its first batch of electric trucks by the fourth quarter of 2021. On November 4, Nikola Corporation (NASDAQ:NKLA) reported its Q3 results, posting a loss per share of $0.22, beating estimates by $0.04.
Wedbush analyst Daniel Ives on November 8 raised the price target on Nikola Corporation (NASDAQ:NKLA) to $15 from $10 and kept a Neutral rating on the shares. The analyst stated that Nikola Corporation (NASDAQ:NKLA) has taken some important steps towards building back its Wall Street credibility. He thinks the company’s Arizona factory build-out, key partnerships, and now settling the SEC issues are “all positives in the eyes of the Street”.
For Q4 2021, Nikola Corporation (NASDAQ:NKLA) plans to achieve some significant milestones. The company is set to deliver pre-series Nikola Tre BEVs for use on public roads hauling customer freight, announce additional fleet testing dealers/customers, purchase land for a centralized hydrogen production hub facility and commercial on-site gaseous generation station, and announce additional hydrogen infrastructure partners.
In the third quarter, 15 hedge funds monitored by Insider Monkey were long Nikola Corporation (NASDAQ:NKLA), up from 12 funds in the preceding quarter. Jeff Ubben’s Inclusive Capital is the biggest shareholder of Nikola Corporation (NASDAQ:NKLA) in Q3, with 10.2 million shares worth $109.6 million.
6. Fisker Inc. (NYSE:FSR)
Number of Hedge Fund Holders: 15
A California-based EV automaker, Fisker Inc. (NYSE:FSR) was launched in 2016 and is working on Fisker Ocean, an electric sports utility vehicle that is designed from vegan and recycled materials.
BofA analyst John Murphy raised the price target on Fisker Inc. (NYSE:FSR) to $24 from $18 on November 10 and kept a Neutral rating on the shares, stating that Fisker Inc. (NYSE:FSR) is somewhat likely to raise low-cost capital, with estimates based on the company’s valuation.
Publishing its third quarter results on November 3, Fisker Inc. (NYSE:FSR) posted a loss per share of $0.38, missing estimates by $0.04.
Fisker Inc. (NYSE:FSR) unveiled new SUVs on November 17, stating that the vehicles would have better driving ranges than Model Y Tesla, Inc. (NASDAQ:TSLA).
A total of 15 hedge funds reported owning stakes in Fisker Inc. (NYSE:FSR) in the third quarter, with total stakes worth $228.1 million. This is compared to 16 funds in the preceding quarter, with stakes equaling $256.2 million.
Fisker Inc. (NYSE:FSR) is one of the best electric car stocks to buy for 2022, in addition to Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), Nikola Corporation (NASDAQ:NKLA), and XPeng Inc. (NYSE:XPEV).
5. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders: 20
Li Auto Inc. (NASDAQ:LI), an electric vehicle manufacturer from Beijing, China, is one of the best electric car stocks to buy for 2022. Li Auto Inc. (NASDAQ:LI) is a trusted supply chain partner of Bosch, Valeo, Magna International Inc. (NYSE:MGA), and Boe, among others.
On December 8, Tiger Securities analyst Bo Pei initiated coverage of Li Auto Inc. (NASDAQ:LI with a Buy rating and a $40 price target. The analyst believes that extended range electric vehicles offer an attractive value proposition to buyers, which should help Li Auto Inc. (NASDAQ:LI) “obtain a reasonable market share”.
Li Auto Inc. (NASDAQ:LI), on November 29, announced earnings for the third quarter, posting an EPS of $0.05, beating estimates by $0.04. The Q3 revenue jumped 220.23% to $1.22 billion, outperforming estimates by $86.37 million.
Of the 867 hedge funds tracked by Insider Monkey in Q3 2021, 20 funds were long Li Auto Inc. (NASDAQ:LI), with stakes worth $468.1 million. Hedge funds in the third quarter increased their stakes in Li Auto Inc. (NASDAQ:LI) as compared to Q2, when the same number of funds held total stakes valued at $457.2 million in Li Auto Inc. (NASDAQ:LI).
Jericho Capital Asset Management is one of the leading Li Auto Inc. (NASDAQ:LI) stakeholders from the third quarter, with 4.64 million shares worth roughly $122 million.
4. XPeng Inc. (NYSE:XPEV)
Number of Hedge Fund Holders: 25
Reporting its third quarter results on November 23, XPeng Inc. (NYSE:XPEV) posted a loss per share of $0.28, beating estimates by $0.06. The $894.88 million revenue gained 197.34% from the prior year quarter, outperforming estimates by $75 million.
XPeng Inc. (NYSE:XPEV) is an electric vehicle manufacturer from Guangzhou, China, and is ranked among the leading Chinese EV companies. Leveraging the internet, artificial intelligence, and advanced driver assisted technologies, XPeng Inc. (NYSE:XPEV) is working on smart EVs. In addition to electric vehicles, the company is offering charging facilities, auto finance, and post sales services.
Morgan Stanley analyst Tim Hsiao on December 7 named XPeng Inc. (NYSE:XPEV) a “Research Tactical Idea”, expecting the share price to rise in absolute terms over the next 15 days. He stated that the company’s fundamentals “remain solid”, in addition to recent valuation becoming more compelling, and kept an Overweight rating on the shares with an HK$275 price target.
25 hedge funds were bullish on XPeng Inc. (NYSE:XPEV) in the third quarter, up from 19 funds in the preceding quarter. The leading XPeng Inc. (NYSE:XPEV) stakeholder from Q3 is Philippe Laffont’s Coatue Management, holding 9.64 million shares worth $342.73 million.
3. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 30
A multinational automobile manufacturer from Shanghai focused on designing and developing electric vehicles, NIO Inc. (NYSE:NIO) is one of the best electric car stocks to buy for 2022.
In Q3 2021, 30 hedge funds monitored by Insider Monkey were long NIO Inc. (NYSE:NIO), with total stakes valued at $1.13 billion. One of the leading NIO Inc. (NYSE:NIO) stakeholders from the third quarter is billionaire Ken Griffin’s Citadel Investment Group, increasing its stake in the company by 232%, holding over 4 million shares worth $143.1 million.
On November 9, NIO Inc. (NYSE:NIO) posted its Q3 results, announcing a loss per share of $0.06, missing estimates by $0.01. Revenue over the period jumped 122.23% to $1.53 billion, exceeding revenue estimates by $62.90 million.
Tiger Securities analyst Bo Pei initiated coverage of NIO Inc. (NYSE:NIO) with a Buy rating and $45 price target on December 8. According to the analyst, NIO Inc. (NYSE:NIO) is well positioned to “ride the global smart” electric vehicle adoption trend in the coming decade and “become a major player in the field”. NIO Inc. (NYSE:NIO) has “successfully established a first-class brand image with superior performance, elegant design, leading services, and a unique user community”, the analyst elaborated further.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Elon Musk’s Tesla, Inc. (NASDAQ:TSLA) is one of the most famous companies in the EV space, specializing in electric vehicles, clean energy, battery storage, and solar products. Tesla, Inc. (NASDAQ:TSLA) reported solid earnings for the third quarter on October 20, posting an EPS of $1.86, beating estimates by $0.25. The revenue increased 56.85% year-over-year, reaching $13.76 billion, outperforming estimates by $54.61 million.
On December 8, New Street analyst Pierre Ferragu raised the price target on Tesla, Inc. (NASDAQ:TSLA) to $1,580 from $1,298 and kept a Buy rating on the shares. The analyst expects 280,000 to 285,000 Tesla, Inc. (NASDAQ:TSLA) vehicles to be delivered in Q4, which would reflect an increase of 40,000 units from Q3 and exceed the consensus forecast of 266,000 units.
One of the leading Tesla, Inc. (NASDAQ:TSLA) from the third quarter is Cathie Wood’s ARK Investment Management, with 3.95 million shares worth over $3 billion. Tesla, Inc. (NASDAQ:TSLA) is an immensely popular EV stock among hedge funds, with 60 funds being bullish on Tesla, Inc. (NASDAQ:TSLA) in Q3 2021, holding total stakes valued at $10.64 billion.
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
Ranking first on our list of the best electric car stocks to buy for 2022 is General Motors Company (NYSE:GM), an American multinational automobile manufacturer that is aiming to deliver 30 new electric vehicles worldwide by 2025. The flagship vehicles at General Motors Company (NYSE:GM) include Chevrolet, Buick, GMC, and Cadillac. General Motors Company (NYSE:GM) is expanding its operations into Michigan, investing over $3 billion in multiple EV projects in the region.
Publishing its third quarter earnings on October 28, General Motors Company (NYSE:GM) posted an EPS of $1.52, beating estimates by $0.55. Revenue for the period equaled $26.78 billion, missing estimates by $1.10 billion.
Daiwa analyst Jairam Nathan downgraded General Motors Company (NYSE:GM) to Neutral from Outperform with an unchanged price target of $65 on December 15, as part of a broader research note on the U.S. auto sector. He shifted his view on the US auto sector from Positive to Neutral, saying “there are risks in the horizon that could undermine valuations”. The risks include slowing growth in China, the transition to electric vehicles hurting margins and cash flow, a flattening yield curve, deteriorating consumer confidence, and uncertain vehicle buying conditions.
General Motors Company (NYSE:GM) is a popular stock among the smart money, with 77 funds in the third quarter being bullish on the company. Warren Buffett’s Berkshire Hathaway is the leading General Motors Company (NYSE:GM) stakeholder from the third quarter, with 60 million shares worth $3.16 billion.
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 Billionaire Ken Griffin’s Portfolio: Top 10 Stock Picks and 10 Favorite Stocks of Cathie Wood and Ken Fisher.
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Disclosure: None. 10 Electric Car Stocks to Buy for 2022 is originally published on Insider Monkey.
