Electric vehicle stocks continue to attract investor attention, considering the growth potential well beyond the decade. However, sentiments for EV stocks have been mixed for year-to-date. It seems to be a year that’s separating the winners from the losers. I am not implying stock performance, but EV companies are positioned to survive and grow amid intense competition. The focus of this column is on three EV stocks to watch in November for a potential breakout rally.
These EV stocks are worth holding until 2030 for multibagger returns and are at interesting levels. It’s worth mentioning that macroeconomic headwinds will likely be sustained next year. This factor is, however, discounted in the EV stocks discussed. Further, company-specific positives in terms of growth and investments ensure that these stocks trend higher even in relatively challenging market conditions.
Let’s discuss these EV stocks to watch out for at current levels.
Li Auto (LI)
Li Auto (NASDAQ:LI) has had an exceptional performance in the last few quarters in terms of vehicle deliveries. Its stock was rewarded with an upside of 133% in the previous 12 months. However, there has been a correction from highs of $47.3 to current levels of $35. This seems like a good opportunity to accumulate, and with deliveries continuing to surprise, I expect a reversal soon.
Li Auto is expected to report Q3 2023 results on Nov. 9. For the quarter, the company has reported deliveries growth of 296.3% on a year-on-year basis to 105,108. A stellar set of numbers is, therefore, in the cards, and LI stock is likely to surge higher.
I further believe that deliveries growth will remain robust next year. The impending launch of LI MEGA is a positive catalyst. Additionally, the company has been aggressively expanding its retail network in China.
From a financial perspective, Li Auto reported cash and equivalents of $10.17 billion as of Q2 2023. This provides high financial flexibility to invest in product development and for aggressive retail network expansion.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) is among the electric vehicle stocks to watch in November. TSLA stock traded at highs of $299 in July. There has been a meaningful correction from those levels, and the stock trades at $207. The delivery weakness has been discounted, and the stock looks attractive.
Further, Tesla plans to commence commercial delivery of its Cybertruck toward the end of the month. This is likely to create some excitement among investors. Tesla Roadster 2.0 is also expected to enter production next year—another upcoming TSLA stock catalyst event.
For Q3 2023, Tesla delivered 435,000 vehicles, and there was a sequential decline in volume. However, the company has maintained a delivery target of 1.8 million vehicles for 2023.
From a financial perspective, Tesla reported $8.9 billion in operating cash flow in the first nine months of 2023. Further, the company had cash and equivalents of $26 billion. This provides high financial flexibility for capital investments.
Panasonic Holdings (PCRFY)
From a valuation perspective, Panasonic Holdings (OTCMKTS:PCRFY) is the top EV stock to watch in November. The battery maker trades at a forward price-earnings ratio of 7.9 and offers a dividend yield of 1.12%. Considering the company’s aggressive expansion plans, the stock trades at a valuation gap, and a strong reversal rally seems likely.
In terms of growth, Panasonic has indicated that the company targets to boost battery capacity to 200 GWh by 2031. This would help quadruple its battery capacity compared to the last financial year and set the stage for sustained revenue and cash flow growth.
It’s also worth noting that Panasonic is looking to diversify. By 2029, the company plans to make solid-state batteries for drones and factory robots. This will likely be a big addressable market in the next few years. Of course, these are long-term plans. However, PCRFY stock is worth buying at undervalued levels for big gains.
On the date of publication, Faisal Humayun 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.
