The electric vehicle (EV) industry is thriving and shows no signs of slowing down. With 10% of the nation’s light-duty vehicle market being electric, there is significant growth potential. In 2021, 9% of new cars sold were electric, and this is expected to increase to 14%. The International Energy Agency predicts that by 2030, 60% of new vehicles sold will be electric.
The future of the EV industry looks bright. Investors have an excellent opportunity to invest in the top EV stocks. Tesla (NASDAQ:TSLA) has been one of the top-performing EV stocks, but up-and-coming companies may outperform in the future. This article highlights three of the best alternatives to Tesla stock.
Byd Co. (BYDDF)
BYD Co. (OTCMKTS:BYDDF) is one of the top EV stocks to consider. It recently reported a staggering 411% increase in Q1 profits, reaching 4.13 billion yuan ($600 million). Sales also rose by about 80% to 120.2 billion yuan.
BYD is expanding in overseas markets and is set to release a new electric SUV to compete directly with Tesla’s Model Y. CNBC reports that the Denza brand has received over 20,000 pre-orders for the N7 SUV, priced between 301,800 yuan and 379,800 yuan ($41,680 to $52,452).
Moreover, BYD Co. is a strong contender in the EV market, along with Tesla and Volkswagen (OTCMKTS:VWAGY). With China’s rapid adoption of EVs and a strong potential for growth, BYD has a chance to lead in the next five years.
Although Tesla currently maintains the lead, selling around 423k EVs in the first quarter compared to BYD’s approximately 265k, BYD’s growth trajectory is impressive. It experienced an 85% year-over-year sales increase, while Tesla’s growth lagged behind at 36%.
ChargePoint (CHPT)
ChargePoint (NYSE:CHPT) is a leading provider of EV charging solutions with a global network of over 200,000 charging ports. While not a direct EV stock, it stands to benefit significantly from the growing EV market.
With a market share of over 65% and a strong network effect, ChargePoint is a solid investment option. Despite its current undervalued status, the demand for EV charging is expected to experience exponential growth as countries phase out fossil-fuel vehicles.
McKinsey reports that the U.S. goal of having 48 million EVs on the road by 2030 would require a charging infrastructure 20 times larger than the current size.
With its established market share, ChargePoint is well-positioned to capture a significant portion of this expanding market. Even with a 30% market share, it has the potential for substantial returns.
ChargePoint is an EV charging infrastructure company set for growth. With a promising Q1 2024 report showing 59% year-over-year revenue growth to $130 million and an improved gross margin, the company is positioned for further success.
As the number of installed charging stations continues to increase, recurring revenue will drive margin improvement. Positive prospects suggest an attractive investment opportunity.
Li Auto (LI)
Li Auto (NASDAQ:LI) is expected to transition to fully electric vehicles as battery technology improves and charging infrastructure expands. While gasoline engines still offer a favorable balance between range and weight for current car buyers, Li Auto differentiates itself from brands like Toyota (NYSE:TM) by focusing on plug-in hybrid vehicles that prioritize electric power in the drivetrain.
Moreover, Li Auto CEO Xiang Li revealed that the company plans to launch its highly anticipated Li MEGA electric vehicle model in the fourth quarter of this year. The CEO expressed confidence that the Li MEGA will be a successful sales hit in the premium price segment. Exciting updates are expected, so stay tuned for more information.
Li Auto’s vehicle deliveries surged in the first half of 2023, surpassing its total deliveries for 2022. In June, Li Auto outperformed its rivals, Nio (NYSE:NIO) and XPeng (NYSE:XPEV), with higher vehicle deliveries, while both competitors experienced a decline in deliveries compared to the previous year.
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.
