Most investors are familiar with the notion that focusing on time in the market rather than timing the market is the best strategy. That applies to the EV stocks mentioned in this article as well. However, timing is also important, and these stocks are priced attractively at the moment. That means it’s a good time to consider entering into a position and beginning your time in the market.
EV shares offer substantial upside in the long run. The automotive market continues to undergo a seismic shift that favors electrification. The last few years have proven as much, with EV-related stocks providing incredible returns in many cases. The shares listed below promise to continue on that path.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) is very clearly nearing an attractive entry point. Recent news, including increased competition and renewed margin concerns, are driving a lot of that action. So, that’s where we should start understanding why Tesla presents an opportunity now.
First, margin concerns. I don’t really believe Tesla’s margin concerns are that much of an issue at all. The firm instituted a series of steep price cuts designed to spike demand and improve market share. Those moves seem to have resulted in the company’s intended effect, as Tesla’s overall sales increased by more than 47% during the first quarter. Margins fell by 11%, but net income still increased during the period. In my opinion, Tesla is a better company than it was a year ago.
Additionally, Tesla faces increasing competition in its EV charging business. Seven major automakers recently combined forces in an effort to build 30,000 fast EV chargers to challenge Tesla. It’s part of a concerted effort to bring their respective brands to market and chip away at Tesla’s dominance over time. That’s the point: It’s going to take those firms a long time for the results to materialize — if at all. Tesla remains the king, and that’s why investors should buy in as prices fall on news that really affects nothing materially at present.
CBAK Energy (CBAT)
CBAK Energy (NASDAQ:CBAT) is one of the most grossly underappreciated EV stocks — period. The Chinese firm manufactures lithium-ion batteries and battery components and is absolutely worth considering at current prices, which stand at $1.20. CBAT shares only have analyst coverage from a single firm. However, shares are rated at $10 by that analyst, making it very interesting.
The reason CBAK Energy is so affordable is a consequence of fluctuating fundamentals. The company’s revenues decreased to $42.4 million from $80.2 million during the first quarter year over year (YOY). In Q1, the firm suffered a $1.38 million net loss, compared to a $680k net loss during the same period a year earlier. The overall trajectory is concerning. However, there are bright spots to consider. The firm’s battery sales increased by 97.1% during the first quarter YOY. Further, CBAK Energy competes in a Chinese market that has adopted EVs wholesale. Those pieces of evidence suggest that CBAT stock can fulfill its promise by affecting a quick turnaround.
CBAT stock offers upside based on the notion that its decline is temporary. The firm increased its battery revenues across several categories in Q1. Investors willing to gamble on that narrative will find that CBAT offers a very attractive entry point at current prices.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) looks set to potentially become a once-in-a-generation type of opportunity for investors. It’s a lithium stock representing a firm that owns the rights to one of the largest lithium deposits in the world at Thacker Pass in Nevada.
The company plans to separate the current firm into distinct entities with LAC shares representing ownership in the Thacker Pass site. It’s the largest lithium mine in the United States and has an estimated life of 40+ years.
Its size and location within the U.S. make it a strategic asset in a global battle for EV dominance. Lithium, like many other commodities, will play a role in geopolitically charged competition for EV market share. It clearly indicates that LAC shares have massive potential to multiply in value moving forward. The company believes in Thacker Pass so much that it will separate the business into a distinct entity. That will happen late this year, and investors who buy in now will be in the best position.
On the date of publication, Alex Sirois did not hold (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.
