Electric vehicles (EVs) are revolutionizing the global automotive industry. And, investing in EV stocks means tapping into a booming auto market. Established automakers are shifting to electric vehicles, and new players are joining the race, creating fierce competition with significant growth potential. EVs represent more than just cars. They encompass a whole ecosystem, from battery makers to charging infrastructure providers and autonomous driving software developers.
With that said, here are my top three EV stock picks for those looking for big-time growth over the next decade.
Byd Co. (BYDDF)
BYD Company (OTCMKTS:BYDDF) stock has climbed 12% in the past year, due primarily to the company’s impressive growth prospects. Despite this rise, BYDDF stock still looks appealing with a forward price-to-earnings ratio of 27.6x. Recently, BYD made a deal to acquire Jabil Inc.’s (NYSE:JBL) mobility business in China. This move could bolster its presence in electric components. Jabil produces printed circuit boards used in various sectors, including EVs and smartphones.
In August, BYD set a new sales record, delivering 274,386 vehicles. That represents a 5% increase from July and a substantial 57% jump from the previous year. The company aims to sell a minimum of 3 million vehicles this year, requiring an average monthly delivery of almost 302,000 vehicles for the rest of the year. Although Tesla (NASDAQ:TSLA) leads in global EV sales, BYD dominates in China and is the country’s largest automaker, ranking 10th globally in the first half of 2023.
Li Auto (LI)
Li Auto (NASDAQ:LI) is on a rapid growth path, driven by new models and an expansive retail presence in China. In Q2 2023, its revenue surged 229.7% year-over-year to $3.86 billion. The company boasts a 21% vehicle margin and $1.33 billion in free cash flow. With $10.17 billion in cash, Li Auto has ample financial flexibility for expansion and innovation.
LI has been in an upward trend since October 2022, reaching a high of $47 by August 2023.
Li Auto is a prominent Chinese electric vehicle manufacturer known for its smart SUVs with extended-range tech, notably the Li L7 SUV. It competes directly with Tesla’s Model Y and enjoys rapid growth in China due to the surging EV demand. Monthly sales consistently rise, highlighting strong demand, and its extended-range technology sets it apart.
Xpeng (XPEV)
XPeng (NYSE:XPEV) is a Chinese smart EV maker striving to accelerate the transition to smart electric vehicles through technology and innovation. The company is growing fast in its core segment, though there are other key factors worth considering when it comes to this stock.
Notably, XPeng made its X2 flying car debut in Dubai last October and later secured a special flight permit from the Chinese government. This means XPeng has become the first Chinese flying car stock with flight safety certification. The X2, introduced in July 2021, completed over 3,000 experiments and tests. Unlike competitors, it’s designed to fit in a home garage.
Moreover, the company acquired the self-driving unit of Chinese ride hailing company DiDi. This allows XPEV not only to develop low-cost EVs but also to collaborate on robotaxis. Xpeng’s advanced autonomous tech, already in testing for robotaxis, combined with DiDi’s extensive customer base, promises substantial future profits. Additionally, the $20,000 EV planned with DiDi is expected to feature autonomous driving. That’s likely to garner even more attention for the company in China and around the world.
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.
