The recent choppiness in the electric vehicle (EV) sector may give a fleeting sense of pause, but weakness often paves the path to opportunity. As global leaders push for a greener future, the vision of millions of EVs plying our streets isn’t a distant dream anymore. Consequently, the notion of EV stocks to buy remains pertinent for those with a keen eye on transformative wealth.
2023 paints a promising canvas, with projections indicating that EV sales could potentially rise to 14 million, capturing an impressive 18% of the global car market share. Fast-forward to the decade’s close, and that figure could rev up by a staggering 60%. Hence, the course is clear – and the industry’s potential is electrifying.
Tesla (TSLA)
No EV stocks to buy list is complete without EV maverick Tesla (NASDAQ:TSLA). While a deliberate margin sacrifice resulted in skepticism, one must look beyond conventional metrics. TSLA stock is not just a carmaker, as its technology and EV charging station endeavors warrant a look at its valuation through a different prism. Hence, amidst the recent sell-offs and market jitters, it’s an ideal time to load up on TSLA stock.
Furthermore, after the second quarter, Tesla boasted a sturdy $23 billion in cash and equivalents, and the first half of the year generated a commendable $5.6 billion in operating cash flow. Also, analysts project that Tesla’s supercharger business could swell to a value bracket of $10 billion to $20 billion by decade’s end. Despite some second-quarter hiccups, underscored by robust revenue juxtaposed against dwindling operating margins, the prevailing market sentiment might be a beacon for those hunting for a prime entry point into the Tesla narrative. Layer that up with its dynamo lineup waiting in the wings, from the Cybertruck and Roadster to the Tesla Semi; the future revenue trajectory seems laden with long-term promise.
Li Auto (LI)
Li Auto (NASDAQ:LI) is among the top EV stocks to buy, and for good reason. It has undoubtedly been the darling of Wall Street this year, having notched up a year-to-date gain of 105%, with more gains expected ahead.
The ascension of LI stock isn’t just a product of market whim; it’s anchored in commendable business strides. Post the unveiling of an array of new models, the company’s vehicle deliveries have been stellar, to say the least. A peek into its second-quarter results showcases a dazzling figure of 86,533 vehicles, marking an astronomic surge of 201.6% year-on-year.
Furthermore, it posted a robust vehicle margin of 21% in the second quarter, echoing the company’s efficiency. Couple that with the impressive $1.33 billion in free cash flows for the quarter, and it’s clear that Li Auto is on the cusp of becoming a cash juggernaut. Bolstered by a fortress-like balance sheet, boasting over $10 billion in cash and equivalents, the company stands armed and ready for expansion ahead.
BYD (BYDDF)
Amid the bustling landscape of automakers, BYD (OTCMKTS:BYDDF) stands tall. With the backing of investing moguls such as Warren Buffet, the Shenzhen-based trailblazer has efficiently navigated the turbulent waters of fierce pricing battles and decelerating demand.
The automaker celebrated a whopping 204.7% surge in first-half profits, attributing it to a record-smashing delivery milestone. Indeed, July emerged as a landmark month for BYD as its deliveries tally swelled to 700,244 vehicles, a feat unparalleled in the second quarter. Additionally, its April-June span raised a net profit of 6.82 billion yuan, marking a 144.7% upswing.
Peeling the curtain further reveals BYD’s ambitious plans ahead. New manufacturing hubs are slated to grace China soon, with another Thai facility poised for a grand 2024 inauguration. Beyond its native stronghold, BYD is foraying into Europe, and its recent endeavors also include the debut of the BYD Dolphin in Australia and the rollout of five novel automobiles in France. Additionally, BYD’s batteries, celebrated for their exceptional durability and superior performance, have become incredibly popular.
Lithium Americas (LAC)
Shares of Lithium Americas (NYSE:LAC) have shed a substantial 22% over the past six months, which might sound the alarm for some, but for the discerning investor, it represents a hidden treasure trove. The stock trades near its 52-week low price of $16.07, and the downturn might be the gateway to a multi-bagger payoff in the future.
Its Thacker Pass project emerges as Lithium Americas’ crown jewel in North America. This venture shines bright with a staggering $5.7 billion after-tax net present value and its projected 40-year mine life solidifying financial promise. And with estimates placing the average annual EBITDA around the $1.1 billion mark, it’s clear that the returns could be massive once production begins.
Moreover, the company has planned to bifurcate into two separate entities. Enter Lithium Argentina, a specialized venture zeroing in on Argentinian assets, likely to unlock extraordinary value. Hence, LAC stock remains an excellent contender in the EV sphere.
Livent Corp. (LTHM)
Livent Corp. (NYSE:LTHM) is a powerhouse in specialty chemicals, with a forte in lithium metal and chemicals. The American company recently heralded a notable second-quarter revenue of $235.8 million, a handsome 7.8% bump from the second quarter in the previous year. It also generated a remarkable net profit margin of 38.2%, underscoring LTHM’s adeptness at profitability. The firm’s power shines through its stellar asset management, evidenced by a robust $2.28 billion in total assets at the end of Q2, escalating by a remarkable 32.7% from the same period last year.
But the narrative doesn’t end here. Livent is turbocharging its portfolio with a recent $10.6 billion all-stock merger with Allkem (OTCMKTS:OROCF), a move set to catapult the firm as the world’s third-largest lithium maestro. Moreover, it also boasts an 11-year supply accord with Ford Motor (NYSE:F) in its arsenal. Hence, Livent is poised to be an indispensable ally in the burgeoning EV revolution.
ChargePoint Holdings (CHPT)
Glancing at its recent stock market performance should raise a few eyebrows, but a deeper dive reveals a promising horizon. A recent study projects the U.S. charging ports to mushroom to an astonishing 18 million by 2027, which positions ChargePoint Holdings (NYSE:CHPT) for tremendous long-term upside. CHPT boasts an enviable 46% market share in EV charging. The firm has doubled its network footprint, positioning itself to capitalize on the accelerating EV adoption.
The first quarter of 2024 further underlined ChargePoint’s momentum, registering a robust 59% year-over-year revenue spike to $130 million. An 800 basis point expansion in its GAAP gross margin caught the market’s eye. Moreover, it has laid out ambitious plans to slash its EBITDA loss by a whopping two-thirds come the fourth quarter. While a transient stock dip post its second-quarter guidance might have caused murmurs, industry pundits view this as an overreaction.
Qualcomm (QCOM)
The road to electrification isn’t just paved with lithium and innovative battery technology. Perhaps another indispensable component revving up the EV sector is semiconductor chips. This is why Qualcomm (NASDAQ:QCOM), a top-tier chip maker, makes for an interesting secondary play – and makes the top EV stocks to buy list. To put things into perspective, an EV may require up to 3,000 chips. Hence, the demand for semiconductors in the automotive sphere, which currently stands at just 11%, is on the cusp of a significant swell.
Moreover, Qualcomm’s revealed its powerful Snapdragon Ride platform, unveiled earlier this year, showcasing a spectrum of autonomous capabilities ranging from Level 1 to Level 5. But Qualcomm isn’t navigating this journey solo; its burgeoning partnerships in the EV realm are testimony to a shared vision of an electrified and interconnected future.
On the date of publication, Muslim Farooque 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.
