EV stocks have multiplied in Tesla‘s (TSLA) wake and as electric cars look to go mainstream — but not all are created equal. Some car stocks are more ready than others for an EV future. Here are the top-rated electric vehicle makers.
X
Are Electric Vehicle Stocks A Good Buy?
Companies with strong track records of earnings growth and market outperformance that are forming bullish chart patterns are the best candidates for stocks to buy and watch, according to CAN SLIM guidelines.
But most of the new EV stocks have neither. They include Fisker (FSR), Canoo (GOEV), Faraday Future (FFIE), Lordstown (RIDE) and Xos (XOS). In fact, many of these EV startups aren’t delivering or producing electric vehicles yet.
However, two startups have begun selling their first electric vehicles, bringing in revenue. Lucid Motors (LCID) began deliveries of the Air, a luxury electric sedan Oct. 30. Rivian Automotive (RIVN) has also started delivering the R1T, an electric pickup, with the R1S SUV due before year-end.
Meanwhile, Chinese EV stocks like Nio (NIO), Xpeng (XPEV) and Li Auto (LI) sell tens of thousands of vehicles, but are unprofitable for now. Then there are legacy auto giants like General Motors (GM), Ford (F) and China’s BYD Co. (BYDDF) that are transforming into electric-vehicle powerhouses.
Ferrari (RACE) will launch its first all-electric supercar in 2025, joining the ranks of EV stocks after rejecting the shift to electric vehicles for decades.
Electric Car Stocks Include Battery Stocks, Charging Stocks, EV Suppliers
The growing universe of EV stocks doesn’t end with carmakers. Other companies make car batteries and car charging stations. Among them are EV charging networks ChargePoint (CHPT), EVgo (EVGO), Blink Charging (BLNK) and Wallbox (WBX).
Hyliion (HYLN) is developing electric powertrains for big-rig trucks as well as powertrains that can be compatible with renewable natural gas and hydrogen fuel cells.
Romeo Power (RMO) makes battery packs for commercial EV fleets. And QuantumScape (QS) touts a major breakthrough in solid-state lithium metal batteries.
Magna (MGA) provided components for the Chevy Bolt EV and will make battery enclosures for GM’s Hummer electric truck, due in late 2021. It already makes e-drive gearboxes for Nio and Xpeng. Magna also will make the Fisker Ocean SUV, due out late next year.
Best EV Stocks To Buy Or Watch
The recent market sell-off has left the charts of several EV stocks badly damaged. But these stocks had the best mix of fundamentals and technicals, as of Nov. 15.
Tesla stock has an IBD Composite Rating of 99 and an EPS Rating of 72. Shares are extended from a 900.50 buy point, meaning they are not in a proper buy zone. TSLA stock slid sharply last week. CEO Elon Musk unloaded nearly $7 billion of shares. Musk is likely to sell even more, though the timing is unclear.
The top auto and EV stock by market cap predicts 50% average annual growth in vehicle deliveries, with 2021 expected to be faster than that pace. In 2020, deliveries grew 36% to 499,647. Its first electric pickup truck, the Cybertruck, is due in late 2022. The new Model S Plaid is Telsa’s fastest car yet, going from zero to 60 miles per hour in less than two seconds.
GM stock has an IBD Composite Rating of 80 and an EPS Rating of 43. Shares are out of range from a 58.70 buy point off a double-bottom base, according to MarketSmith chart analysis. On Nov. 17, GM will open its Factory Zero all-electric assembly plant in Michigan. General Motors on June 16 again hiked its spending on electric and autonomous vehicles to $35 billion through 2025. It aims to launch 30 new EVs around the world by then. Those vehicles will include a Hummer electric truck, set to arrive in late 2021; luxury Cadillac electric SUV, coming by mid-2022; and a Hummer electric SUV, due by early 2023.
Ford stock has a Composite Rating of 88 and an EPS Rating of 36. Shares are far extended from a 16.55 entry. The company recently reinstated the Ford stock dividend and hiked full-year outlook. In late May, Ford hiked spending on electric vehicles to more than $30 billion by 2025, and expects 40% of its global sales to be fully electric by 2030. Its goal is to launch 16 fully electric cars by 2022. Ford has received 150,000 reservations for the F-150 Lightning, its first electric truck. That Cybertruck rival is due by mid-2022. Ford also owns 12% of Rivian.
Lucid stock has a Composite Rating of 62 and an EPS Rating of 4. Lucid stock is far beyond buying range from a 28.49 cup-with-handle entry. On Monday, the new Lucid Air EV won MotorTrend’s coveted “2022 Car of the Year” award, ahead of Lucid’s first earnings report. Red-hot Lucid went on a tear in the past weeks after starting its first EV deliveries. The startup should start generating revenue while profits are still a way off. Lucid’s Air Dream edition outguns the longest-range Tesla car by more than 100 miles. The Air Dream starts at $169,000, with more affordable versions to follow.
BYD (BYDDF) has no Composite Rating and an EPS Rating of 36, but it is profitable. Shares are extended from a 35.35 double-bottom entry. The Chinese car and battery giant is making a big shift to electrification, which shows early signs of success. October sales of BYD’s electric and hybrid-electric vehicles more than tripled, rising by roughly 10,000 for a fifth straight month. BYD, a long-time holding of Warren Buffett’s Berkshire Hathaway (BRKB), also has begun selling EVs in Norway, starting with the Tang SUV.
Xpeng stock has a Composite Rating of 61 and an EPS Rating of 7. Shares are back below a 48.08 buy point in a choppy cup base. Another EV startup, China’s Xpeng also more than tripled October EV sales, continuing a hot sales streak. Alibaba (BABA)-backed Xpeng already sells two electric SUVs and two electric sedans, an impressive lineup for a young EV company. A new flagship SUV, possibly called the G-7, may be coming in 2022, along with a highly advanced driver-assist system and a self-driving car service.
In the near term, EV stocks will continue feeling the squeeze from the global chip shortage that is affecting the overall auto industry. But longer term, more government support is likely headed for electric vehicles, while prices are coming down.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
YOU MAY ALSO LIKE:
The Next Tesla May Emerge From This Explosion Of New EV Stocks
Is Nio Stock A Buy Right Now As Chinese Electric Cars Boom?
Stocks To Watch: Top-Rated IPOs, Big Caps And Growth Stocks
Find The Latest Stocks Hitting Buy Zones With MarketSmith
