Investors continue to avoid EV stocks overall. That’s evident when you look at the performance of representative ETFs including iShares Self-driving EV & Tech ETF (NYSEARCA:IDRV) and Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV). Those investments are at best stagnant in 2024 and more likely to have sustained double-digit losses.
The EV market continues to face multiple headwinds including lower realized sale prices, uncertainty around the upcoming U.S. Presidential election, and a broad lack of EV charging infrastructure.
Yet, overall, EV sales are growing just at a slower pace. It is expected that one in five vehicles sold globally in 2024 will be an electric vehicle. That’s higher than the 18% recorded in 2023 but represents a slowdown In trajectory given that 14% of vehicle sales were electric in 2022. Overall, there continues to be a lot to weigh for EV investors. That said, the safest EV stocks continue to represent strong investments.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) continues to battle in what has been a very difficult 2024 for the most valuable EV stock. Share prices are down nearly 28% year to date. However, a clear bottom may have been reached and momentum is currently on Tesla’s side. Over the last month, TSLA shares have appreciated by more than 25%.
The stock market is driven in large part by influential firms that exert significant power. Among them is Morgan Stanley. Fortunately for Tesla, the influential wealth manager recently reiterated its overweight rating for Tesla, giving it a Target price of $310. Readers interested in the calculus behind that price target should read here.
There’s also been a lot of back and forth regarding future cheaper models from Tesla. As it stands now, it appears that the company will launch value models in the second half of 2025. Those models could go a long way in normalizing share prices given that current high prices for EVs appear to be unsustainable. Meanwhile, Tesla continues to make progress in regard to its semi-truck. Overall, there’s a lot to like about Tesla and it appears that the markets are again interested in the stock.
BYD (BYDDY)
BYD (OTCMKTS:BYDDY) has to be on the must-buy stock list of any serious EV investor. It is a clear threat to Tesla and surpassed Elon Musk’s company by deliveries during the fourth quarter. BYD sold more than 500,000 vehicles during that period, surpassing Tesla in deliveries for the first time ever.
The company is not slowing down. By May 1, BYD had sold 936,000 vehicles. That represented nearly 24% growth over the same period last year. It included more than 434,000,000 pure electric vehicle sales, up nearly 18%.
BYD continues to represent a strong investment play on both the rebound of stocks in China and those in the EV sector. Evidence of an ongoing resurgence in both suggests that investing in BYD is a great idea at the moment. That aside, BYD’s raw performance alone makes it a worthwhile investment. Tesla has a real competitor on its hands and both stocks look strong at the moment.
Albemarle (ALB)
Albemarle (NYSE:ALB) should be the first choice for investors looking at the EV commodity market. The company is the largest lithium company in the United States and the world. I believe Albemarle should be the first choice because it offers modest income through a dividend, huge price appreciation potential, and economies of scale that other firms simply can’t match.
In short, once the EV sector inevitably rebounds, Albemarle is going to rise rapidly. In fact, that may already be underway given that shares have surged by nearly 15% over the last month. There’s plenty of gross remaining even to get back to. Albemarle shares are still down by double digits in 2024 so investors should not worry that it’s too late to invest.
Albemarle also beat earnings estimates early in the month of May. Earnings fell substantially on a year-over-year basis but were still stronger than Wall Street had been anticipating, stoking hope for a resurgence. Weeks Later Albemarle continues to have momentum in its favor and that’s a strong reason to buy.
On the date of publication, Alex Sirois 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.
