In this article, we discuss the 10 EV stocks popular on Reddit.
The global chip shortage has hit the production of electric vehicles (EVs) around the world in recent months but EV stocks have paradoxically rallied amid this decline, perhaps because of the appeal of the new technology and the rapidly increasing demand of EVs. Electric vehicles are forecast to reach 7% of all global car sales this year, a 66% year-on-year growth, to reach over 5 million units sold. According to Research and Markets, a market intelligence firm, EV sales will represent nearly half of annual global vehicle sales by the end of this decade.
Growing EV markets in Europe, China, and the United States are likely to lead this boom. These regions are also expected to produce the bulk of the EVs shipped to other parts of the world. Consumer and government spending into the sector are also likely to increase as carbon emissions control becomes central to policymaking. A European proposal to push combustion engines off the road by 2035 has already won many backers.
Professional services firm Deloitte expects the EV industry to grow at a compound annual growth rate of 29% in the next ten years. In a report, the firm has forecast that China will likely control close to 50% of the global EV market by 2030, with Europe and the US following behind at 27% and 14% respectively. Some of the factors that will likely influence the pace of this growth include consumer sentiment, policy and regulation, original equipment manufacturing strategy and the role of corporate companies.
Retail traders are expected to play an important part in this whole story. These traders, who like to invest in growth stocks, have already poured hundreds of millions into equities this year. The enthusiasm with which a new generation of investors has embraced the stock market is evident from a cursory glance at finance forums on Reddit. In fact, since these forums became relevant to the moving of markets after the GameStop short-squeeze saga, they have also become the subject of probes and scrutiny from big finance.
These forums have helped drive an incredible rally into EV stocks this year. Some of the top EV stocks presently popular on Reddit include Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and XPeng Inc. (NYSE:XPEV), among others discussed in detail below. In the next few years, financial incentives, access restrictions, emissions targets, and the buildup of EV infrastructure will all help the EV industry to new highs. The recent initial public offering of Rivian, the biggest IPO in the US this year, is a testament to where the market is headed.
Our Methodology
These were picked from a careful assessment of comments published on different Reddit forums over the past twenty-four hours. The details of each stock are mentioned alongside a discussion around analyst ratings and business fundamentals to provide readers with some context for their investment decisions.
The hedge fund sentiment around each stock was calculated using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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EV Stocks Popular on Reddit
10. Canada Nickel Company Inc. (OTC:CNIKF)
Number of Hedge Fund Holders: N/A
Canada Nickel Company Inc. (OTC:CNIKF) is a Toronto-based firm that explores and discovers nickel sulphide assets. It was founded in 2019 and has a market cap of more than $207 million. One of the premier assets of the company is the Crawford Nickel-Cobalt Sulphide Project in northern Ontario. The nickel firm has 100% ownership rights over the property. The 52-week price range of the stock lies between $1.2 and $3.6.
Canada Nickel Company Inc. (OTC:CNIKF) stands to benefit from the massive increase in nickel demand as nickel is an important component of electric vehicle batteries. As EV sales increase, so does the growth of the company. The location of the Ontario project is ideal for US-based EV firms as well.
Roth Capital analyst Matthew Farwell recently initiated coverage of Canada Nickel Company Inc. (OTC:CNIKF) stock with a Buy rating and a price target of C$6.2, noting that the Crawford Nickel-Cobalt Sulphide Project could be one of the largest nickel mines in the world when finished in 2025.
Just like Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and XPeng Inc. (NYSE:XPEV), Canada Nickel Company Inc. (OTC:CNIKF) is one of the stocks attracting the attention of retail investors.
9. Ozop Energy Solutions, Inc. (OTC:OZSC)
Number of Hedge Fund Holders: N/A
Ozop Energy Solutions, Inc. (OTC:OZSC) makes and sells renewable energy products. Some of these include power supplies, high voltage battery chargers, aircraft ground support equipment, and power electronic modules. In late October, the firm had announced that it had received an order for the delivery of three power units from a commercial electric aircraft firm. One unit would consist of a 100KW power supply and a large 100 KW load bank.
In June this year, Ozop Energy Solutions, Inc. (OTC:OZSC) stock had soared after the firm revealed that it had received an order for setting up 38 EV charging stations across New York. The order came with a pre-incentive of $2 million.
In March, Ozop Energy Solutions, Inc. (OTC:OZSC) secured a 25-year lease on a property to build a lithium-ion battery storage facility. These batteries are used in EVs and automakers are investing billions of dollars annually into their production.
8. Arcimoto, Inc. (NASDAQ:FUV)
Number of Hedge Fund Holders: 4
Arcimoto, Inc. (NASDAQ:FUV) markets three-wheeled electric vehicles. Even though the short interest on the stock is at an astronomical 33%, the company is the subject of intense buying interest from retail investors who point to growth catalysts like the sale of 68 EVs and the production of 74 in the third quarter despite supply chain issues that have hampered the process of manufacturing across the globe.
In October, Arcimoto, Inc. (NASDAQ:FUV) had announced that test runs for the Arcimoto Flatbed pilot vehicles had been very well received in local businesses. As part of a plan to mass produce these, the company is building a new factory site as well.
At the end of the second quarter of 2021, 4 hedge funds in the database of Insider Monkey held stakes worth $5.1 million in Arcimoto, Inc. (NASDAQ: FUV), down from 5 in the previous quarter worth $5 million.
7. Ideanomics, Inc. (NASDAQ:IDEX)
Number of Hedge Fund Holders: 6
Ideanomics, Inc. (NASDAQ:IDEX) offers fintech and other services to advance the adoption of electric vehicles. The stock has soared since late August after the firm announced that it had acquired VIA Motors International, a Utah-based EV developer, for $450 million. VIA aims to market electric buses and trucks for commercial purposes in the United States and Canada. VIA remains a distinct business unit after the purchase.
Ideanomics, Inc. (NASDAQ:IDEX) has also recently announced that it will be increasing its stake in Energica, an Italian electric motorcycle manufacturer, to 70%. Energica is on a solid growth trajectory, doubling motorcycle sales in 2020 and has had a good start to this year as well.
At the end of the second quarter of 2021, 6 hedge funds in the database of Insider Monkey held stakes worth $34 million in Ideanomics, Inc. (NASDAQ: IDEX), down from 7 in the preceding quarter worth $20 million.
6. Lordstown Motors Corp. (NASDAQ:RIDE)
Number of Hedge Fund Holders: 12
Lordstown Motors Corp. (NASDAQ:RIDE) is an automotive firm that makes and sells full-sized electric pickup trucks. The firm posted earnings for the third quarter on November 11, beating market estimates on earnings per share by $0.02. The stock gained 24% the same day after the firm announced that the manufacturing and deliveries of Endurance, the flagship EV marketed by the firm, will begin in the third quarter of 2022.
Lordstown Motors Corp. (NASDAQ:RIDE) has built a strategic partnership with Foxconn, a Taiwan-based manufacturing firm, to make components for Endurance. The partnership includes the sale of a Lordstown facility to Foxconn for $230 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm OZ Management is a leading shareholder in Lordstown Motors Corp. (NASDAQ:RIDE) with 902,900 shares worth more than $9.9 million.
In addition to Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and XPeng Inc. (NYSE:XPEV), Lordstown Motors Corp. (NASDAQ:RIDE) is one of the stocks on the radar of growth investors.
5. Workhorse Group Inc. (NASDAQ:WKHS)
Number of Hedge Fund Holders: 13
Workhorse Group Inc. (NASDAQ:WKHS) makes and sells battery electric vehicles and aircraft. The company has a market cap of $1 billion and posted $1.3 million in revenue last year. The short interest on the stock is over 33%. The firm even missed market estimates on earnings for the third quarter despite a change in higher management that saw a new CEO take charge and promise rapid recovery.
Reports of a government probe into Workhorse Group Inc. (NASDAQ:WKHS) has also hit the stock. The continued interest of Redditors in the firm suggests that it might be a short-squeeze play like the GameStop and AMC Entertainment saga.
At the end of the second quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $60 million in Workhorse Group Inc. (NASDAQ: WKHS), down from 16 in the preceding quarter worth $96 million.
4. Canoo Inc. (NASDAQ:GOEV)
Number of Hedge Fund Holders: 16
Canoo Inc. (NASDAQ:GOEV) is a mobility technology company based in California. The firm, which markets electric vehicles, recently announced that it had reached an agreement with Japanese firm Panasonic for the supply of batteries it needs to start production of lifestyle electric vehicles in the fourth quarter of 2022. The stock has also benefited from the successful passage of the American Jobs Plan that will incentivize EV production in the US.
Roth Capital analyst Craig Irwin has a Neutral rating on Canoo Inc. (NASDAQ:GOEV) stock with a price target of $7. The analyst said in a note on September 20 that the “unique design” of the vehicles of Canoo “resonates with a range of potential buyers”.
At the end of the second quarter of 2021, 16 hedge funds in the database of Insider Monkey held stakes worth $37 million in Canoo Inc. (NASDAQ:GOEV), the same as in the previous quarter worth $14 million.
3. XPeng Inc. (NYSE:XPEV)
Number of Hedge Fund Holders: 19
XPeng Inc. (NYSE:XPEV) makes and sells smart electric vehicles. The company has recently announced that it will be launching a new smart EV model at the 19th Guangzhou International Automobile Exhibition. According to reports, the new model will be a new version of the G3 SUV the company already markets. The firm is one of the largest EV makers in China and reported a 233% year-on-year growth in EV deliveries in October.
Citi analyst Jeff Chung recently reiterated a Buy rating on XPeng Inc. (NYSE:XPEV) stock and raised the price target to $87 from $53.4, noting that EV makers were set to gain market share in the coming years.
At the end of the second quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $784 million in XPeng Inc. (NYSE:XPEV), the same as in the preceding quarter worth $976 million.
2. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 55
Ford Motor Company (NYSE:F) is a Michigan-based automaker that is investing heavily in electric vehicles. The company was recently awarded a massive $8.6 billion government contract for the delivery of 2022 light vehicles that include sedans, light trucks and SUVs. The company has a market cap of $77 billion and posted over $127 billion in revenue last year. Ford expects to face tough competition from Rivian and General Motors in the electric pickup space.
On October 28, investment advisory Benchmark maintained a Buy rating on Ford Motor Company (NYSE:F) stock and raised the price target to $20 from $18. Michael Ward, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $2.10 billion in Ford Motor Company (NYSE:F), up from 49 in the preceding quarter worth $2.19 billion.
In its Q1 2020 investor letter, Greenlight Capital Fund, an asset management firm, highlighted a few stocks and Ford Motor Company (NYSE:F) was one of them. Here is what the fund said:
“General Motors (GM) was a disappointment. The damage from last year’s strike consumed most of the cash flow GM would have otherwise generated in 2019. We had expected a strong bounce back in earnings and cash flow in 2020, but the annual guidance, while meeting Wall Street expectations, was worse than we expected. Further, the cash burned during the strike needed to be re-earned in order to protect GM’s investment grade rating. Pre-crisis, there would have been, at best, a minimal share repurchase late in the year. At the analyst day, our hopes that 2020 would finally be the year were dashed. We sold our stock. Over our five-year holding period, we made a 9.6% IRR on GM. In the difficult environment, its most comparable peer, Ford, lost about half its value.”
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA) is one of the most popular stocks on Reddit and this has certainly helped the company become not only the largest EV maker but also jump amongst the biggest companies in the world in terms of market capitalization. For the first time since 2016, founder Elon Musk is selling a portion of the stock he owns in the company. In the past few weeks, he has sold nearly 6.4 million shares worth almost $7 billion. This has hit the stock, which is down 15% from the peaks reached in October.
Analysts are still bullish on Tesla, Inc. (NASDAQ:TSLA). Jefferies analyst Philippe Houchois recently raised the price target on the stock to $1,400 from $950 and kept a Buy rating on the shares.
At the end of the second quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $9 billion in Tesla, Inc. (NASDAQ:TSLA), down from 62 in the previous quarter worth $10 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 10 Best Healthcare Dividend Stocks to Buy Now and 10 Dividend Stocks with Over 20 Years of Dividend Increases.
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Disclosure. None. 10 EV Stocks Popular on Reddit is originally published on Insider Monkey.
