The pace at which the electric vehicle (EV) industry is growing might have slowed, but it hasn’t come to an end. Governments still want to achieve their long-term goals and are looking to increase the penetration of EVs across the world. Many companies are going through a period of transition towards electric vehicles, and while the competition is extreme, several EV makers are successfully thriving in the industry.
As per the International Energy Agency, EVs need to contribute to 60% of total car sales globally by 2030 to stay on track to net zero. That means the demand is only going to rise. If you haven’t considered buying an EV, you might want to think about investing in an EV stock with ample upside potential. Here are the top three EV stocks to buy.
Li Auto (LI)
One of the top EV stocks you will never regret buying is Li Auto (NASDAQ:LI). Emerging as a top Tesla (NASDAQ:TSLA) competitor, Li Auto has gained prominence in the industry this year. It is one EV maker that successfully managed to survive a pandemic, inflation and tight consumer spending. Despite the market uncertainty, it impressed investors with strong financials and consistent delivery growth. LI stock is exchanging hands for $42 and is up 100% year to date.
The company’s financials prove it is making the right moves and is ready to charge ahead. In the recent quarter, Li reported a record 105,108 deliveries in the quarter, beating projections and representing a 296% year-over-year rise. It aims to deliver between 125,000 and 128,000 cars in the final quarter of 2024.
Further, the total revenue came in at $4.75 billion, a 271% year-over-year rise, and the net income was $385.5 million. Li’s numbers are proof it has come a long way, but there is a lot more to come. LI will join the Hang Seng Indexes on December 4.
The driving force behind the company is its impressive products. Li’s range of cars is high in demand and one of the best-selling across China. It recently unveiled the Li MEGA at Guangzhou 2023. With the company steadily working on increasing the product lineup, investors have a lot to look forward to. Bank of America (NYSE:BAC) analysts raised the price target of the stock to $62, while Barclays (NYSE:BCS) has a price target near $50. LI is one of the top EV stocks to buy today.
EV Stocks to Buy: BYD (BYDDF)
The one EV stock to buy hand over fist is BYD (OTCMKTS:BYDDF) — Tesla’s biggest competitor. Besides its solid global presence, BYD reported impressive delivery numbers, and it is aiming big. In the recent quarter, its net profit came in at $1.42 billion, a whopping 82% rise from the previous year.
The company does not limit itself to China and has gained a strong hold on the global markets. It is also one of the largest battery makers in the world.
In the coming year, it will have the Thailand factory up for production, and that will help increase the deliveries. The company is set to overtake Tesla in the deliveries in the final quarter of 2023. Still, the stock looks cheap to me.
Trading at $31 today, BYDDF stock is up 24% year to date and is very close to the 52-week high of $36. The stock hasn’t kept pace with the growing profits. That means you can buy the stock while it’s still at a lower price. For a company challenging Tesla, that is a fair price to pay.
One reason to bet on the stock is its export momentum. That is growing, and it is hard to ignore. BYD has a massive opportunity to capture the market outside China, and that is where it’s winning. It also has a lower-cost vehicle range, which makes the cars more appealing to buyers. BYDDF remains one of the top EV stocks to buy now.
Rivian Automotive (RIVN)
Leading EV maker Rivian Automotive (NASDAQ:RIVN) has shown impressive growth lately. It has two truck models for the consumer market, but the majority of its earnings come from supplying delivery vans for Amazon (NASDAQ:AMZN). While the company remains unprofitable, it could lead to massive gains over the next few years. Investing in RIVN stock could be an opportunity to take home big money. Exchanging hands at $16, the stock is up 19% in the past six months while still down nearly 3% year to date.
The company couldn’t impress investors despite its impressive results, but the stock could soar in the future. It ended its exclusivity contract with Amazon and can now sell commercial electric vans to other companies as well.
While it will continue to supply 100,000 EVs to Amazon by 2030, it can also increase its market share and, thus, its sales. Ending this exclusivity contract can benefit Rivian, and we could see a significant rise in the sales over the next year.
When it comes to earnings, Rivian did manage to beat expectations and reported a loss of $1.19 per share, which was lower than the expectations of Wall Street. While the company is still reporting losses, we can certainly see an improvement.
It reported a net loss of $1.37 billion, down from $1.72 billion in the previous year, and raised its production guideline to 54,000 cars from the previous 52,000. That is nothing but impressive, and there is a lot to like about the company right now. Yes, the risks are there, and the industry is competitive, but Rivian is making strong moves.
With a production guideline upgrade and an improvement in the bottom line, it looks like RIVN stock is ready to see some upside. If you can tolerate a little risk, Rivian is worth betting on.
On the date of publication, Vandita Jadeja 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.
