EV stocks represent to companies involved in the manufacturing of electric vehicles or their components, like batteries and autonomous systems.
While major car manufacturers like Ford (NYSE:F) and General Motors (NYSE:GM) are developing electric models, I do not consider them electric car companies, as their primary products are not electric vehicles.
The most promising EV stocks are those already producing and selling electric cars, rather than those in the planning stages.
Here are three of the best EV stocks to buy, for those with a long-term investing time horizon.
Byd Co. (BYDDF)
BYD Co. (OTCMKTS:BYDDF), a strong Tesla (NASDAQ:TSLA) competitor, is seizing its advantages and growth prospects.
With the introduction of the Fang Cheng Bao EV brand and remarkable sales of 996,476 cars in the first five months of this year, BYD is expanding its global presence in markets such as Japan, Europe, and Latin America.
As a top EV battery manufacturer, BYD aims to strengthen its position in the thriving Chinese EV market through enhanced production of its lithium iron phosphate Blade Batteries.
BYD could lead the EV market in the next five years with China’s fast EV adoption and appetite for growth. Currently, Tesla is ahead, selling 423k EVs compared to BYD’s 265k. However, BYD’s sales are growing at a faster rate (85% YoY) than Tesla’s (36%).
It’s challenging to predict the breakout leader within a year, as VW’s expected surge hasn’t happened yet. Tesla and BYD are competing for global EV market dominance.
Tesla (TSLA)
Tesla isn’t a stock I’m bullish on by any stretch of the imagination, but it’s also impossible to ignore this company’s long-term performance and position within a very lucrative market.
With a market cap of $800 billion, Tesla is on track to reach a trillion-dollar valuation. The stock has surged 39% this month, contributing to its impressive 130% year-to-date growth.
Tesla’s integration of AI and progress in its full self-driving platform further enhances its appeal among many growth investors. Additionally, the company’s expansion into India and Elon Musk’s innovative leadership add to its investment potential.
Regardless of a temporary decline in profitability, Tesla’s market share continues to expand, surpassing traditional automakers. Although the gross profit margin has slightly decreased, Tesla’s overall profitability remains remarkable.
With strong sales growth and ongoing efforts to improve profitability, the company’s high valuation is well-justified. As Tesla continues to capitalize on its potential, expect its stock price to trend upward in the future.
Li Auto (LI)
Li Auto (NASDAQ:LI) emerges as a promising Chinese EV stock for long-term investment.
Despite a substantial 65% surge this year, the stock continues to hold potential. The company’s positive business advancements and impressive delivery growth, with a remarkable 146% YoY increase in May, contribute to its ongoing rally.
This automotive trailblazer has just revealed its outstanding second-quarter performance, exceeding estimates by selling a remarkable 466,140 units. This translates to an impressive 83% surge in deliveries compared to the previous year’s figures.
The company achieved record-breaking results in the first quarter with an astonishing 422,875 units sold.
Don’t overlook the growth potential of Li Auto in 2023. China’s government has granted EV manufacturers like Li Auto the opportunity to sell clean energy vehicles, making it a promising investment.
With a large population and a growing middle class, China offers substantial market opportunities. Consider investing in LI stock.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
