The long-term trend favors electric vehicle (EV) production even if it’s not a smooth transition. That certainly appears to be the opinion of analysts. That’s why there are currently many EV stocks with strong price targets.
That being said, current headlines suggest that electric vehicle sales haven’t lived up to the hype. There are several factors that account for the current state of the EV market. Higher interest rates are keeping many potential buyers out of the market, there are ongoing concerns about range anxiety, and EVs are expensive. There’s a reason Tesla (NASDAQ:TSLA) is cutting prices on its EVs.
But investing is frequently about playing the long game, and for investors looking for potential high payoffs down the road, here are three EV stocks to buy right now. In addition to high price targets, these companies offer investors compelling reasons to buy them for the long haul.
Rivian Automotive (RIVN)
Rivian Automotive (NASDAQ:RIVN) is down nearly 15% after the recent earnings report. But before it was down, it shot up, and the long-term outlook suggests it will rise again.
The company exceeded expectations for both the top and bottom lines, and reiterated its bullish production guidance. Rivian also announced that it was no longer bound to its exclusive contract with Amazon (NASDAQ:AMZN) for production of Class-4 vehicles. Additionally, the company is making progress on building its manufacturing facility in Georgia, though that comes with an additional $15 billion of debt for construction.
Nevertheless, the 21 analysts who issued a one-year price forecast for the stock have an average price of $26.62, a 59% increase from the price as of Nov. 14, 2023.
While some believe the analysts may be wrong, right now RIVN stock appears to be a good EV stock to buy.
Li Auto (LI)
An emerging story in the U.S. EV market is how Tesla is now lowering prices to capture market share and will likely continue to do so. Li Auto (NASDAQ:LI) is using a similar playbook in its home country of China.
In the company’s November earnings report it announced delivery of 40,422 vehicles. That’s an increase of more than 302% year-over-year (YOY). In China, Li Auto delivered 41% more vehicles than Tesla in October.
The added deliveries also came with a slight increase in the company’s margins which are now over 21%. Margin growth over the last year is up more than 9%.
Many EV makers are barely out of the starting gate and even if they’re generating revenue, many are not profitable. As EVs race to scale production, many are simply not going to have the capital to get across the finish line. Analysts agree that’s not a worry for Li Auto. Despite its 93% gain year-to-date (YTD), analysts have a consensus price target of $53.99 on the stock. That’s a 30% gain from its price as of Nov. 14, 2023, making it one of the top EV stocks to buy at this time.
ChargePoint (CHPT)
A company doesn’t have to directly manufacture electric vehicles to be considered one of the best EV stocks with strong price targets right now. As EVs become more mainstream, the charging infrastructure must be built out, too. That has helped ChargePoint (NYSE:CHPT) become one of the current leaders in this space.
But being the leader hasn’t meant much to investors as CHPT stock is down 65% for the year. This is partly because ChargePoint did not agree until recently to adopt, or at least become compatible with, Tesla’s established charging network. The company has also heavily diluted its stock and remains several years away from profitability at best. Investors should be careful to understand those risks before investing their money.
But investors looking for EV stocks to buy should at least give CHPT a look. At time of writing, the stock is trading as a penny stock at $3.23 per share, but analysts give the stock a consensus price target of $9.79, a 203% increase. CHPT stock may be more of a trade than an investment, but investors with an appetite for risk may want to consider its opportunity.
On the date of publication, Chris Markoch 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.
