Electric vehicle stocks have been noisy over the past few years. That’s made it difficult for long-term investors. Even nimble traders looking for discounted EV stocks have had to exercise caution in this sector.
One reason for the noise is that manufacturing automobiles is a capital-intensive business. That’s even true for legacy automakers who have had to retool production lines for a new generation of vehicles.
Tesla (NASDAQ:TSLA) casts a huge shadow over the entire sector. There’s no question the company has a huge start in brand awareness and adoption.
And while Tesla continues to beat its internal production and delivery numbers, other EV manufacturers, many of whom are startups, have struggled to get EVs off of their production lines.
That tide is starting to turn. Consumers are beginning to take delivery of EVs from other companies. The last 18 months have been positive for many companies that supply EV manufacturers. It may finally be time for EV stocks to have a rally of their own and here are three discounted EV stocks that may be solid long-term buys.
Ford Motor (F)
The EV industry has been a victim of elevated expectations. And as the recent stock price movement in Ford Motor (NYSE:F) shows, some of the problems are self-inflicted. Ford made a bullish forecast that it would manufacture two million EVs a year by the end of 2026.
However, in the company’s July 2023 earnings report, the company walked that back sharply. In fact, the company now projects it expects to cap 2024 production at 600,000 vehicles. F stock dropped about 4% on that news, and for the last 12 months, the stock is down over 12%.
As of this writing, F stock is in the middle of its 52-week range. So, investors need to consider if the stock is closer to its 52-week low or its 52-week high. The answer, in an environment of higher interest rates and sticky inflation, maybe that it will be rangebound.
But if you’re looking for discounted EV stocks that have growth potential, Ford belongs on that list. The issue facing the company is lack of demand, not lack of production. And Ford has the marketing muscle to stay top-of-mind with their base of customers while it waits for better economic conditions.
Nio (NIO)
Nio (NYSE:NIO) stock surged 48% in July 2023 on the back of better-than-expected production numbers. The Chinese company reported a record 20,462 deliveries in July. That was nearly double the prior month as well as from the same quarter in 2022.
Still, the stock makes this list of discounted EV stocks because it’s still down over 26% in the last year. And as described by Louis Navellier for InvestorPlace, Nio has its fingers in many pies, many of which have nothing to do with its core business of making electric vehicles.
However, one reason for the stock price decline is that the company’s primary audience is in China which has been struggling to get its economy firing on all cylinders. There could be a silver lining coming as the Chinese government is injecting stimulus into its economy which should be a net positive for Nio.
Fisker (FSR)
Fisker (NYSE:FSR) is undoubtedly the riskiest stock on this list of discounted EV stocks. The company is not yet profitable and is only now beginning to push its first vehicles off the production line.
However, like many EV makers, Fisker disappointed investors with lower-than-expected production in the second quarter of 2023. Citing parts shortages, Fisker said it delivered 1,022 EVs which was below its initial forecast of 1,400 to 1,700 vehicles.
But with approximately$650 million of cash on hand, and the company beginning to generate revenue, investors can hope that the pace of the company’s losses – which were about $80 million in the last quarter, begin to slow.
FSR stock remains highly speculative, and with 22% short interest, retail investors face a heavy lift. That’s why many investors may want to wait a quarter or two to verify that its production will not be subject to future delays.
On the date of publication, Chris Markoch 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.
