EV stocks have not made the best investments in 2024. American EV maker Tesla (NASDAQ:TSLA), a notable pioneer of the space, has seen its share price plummet more than 28% on a YTD basis despite a strong comeback in 2023. High interest rates and waning consumer demand for new automotives loom over the depressed outlook for the broader EV market. With doubts that interest rates cuts will even happen this year, EV stocks are probably headed for further losses.
However, there could be a silver lining. Not all EV companies are reporting significant declines in sales growth. For example, a number of Chinese electric vehicle manufacturers are embracing the intense competition in their home market and have even been able to increase YoY sales growth in way many analysts had not expected.
Moreover, electric vehicle innovation is not confined to just everyday automotives. Luxury segments of the space as well as electric flying vehicles are sub-verticals of the wider EV market growing at a rapid rate.
Below are 3 EV stocks leading the charge to uncharted territories.
BYD (BYDDY)
BYD (OTCMKTS:BYDDY), while not making unconventional electric vehicles, has certainly taken the broader market by storm in appealing to various segments of the EV market. The EV maker’s prowess in manufacturing lithium-ion batteries has also given BYD an upper hand in designing its electric and hybrid vehicles. Unlike a number of U.S. and European EV makers, BYD’s appeal to the masses, especially to those in the Global South, sets its apart from the rest of its counterparts.
Not to mention, as Tesla has reported declines in sales and deliveries, BYD has reported the exact opposite. For the first quarter of 2024, BYD sales increased 46% on a year-over-year basis to 301,631 “new energy vehicles.” Recently, for the month of May, the Chinese EV behemoth was able to grow sales by 38% from May 2023.
BYD is likely to continue breaking into emerging markets, such as Brazil, Thailand and others, which would effectively expand its global footprint. The share price of the Chinese EV maker has risen modestly in 2024 but still trades at relatively cheap valuation multiple compared to Tesla or other Western EV peers.
Rivian (RIVN)
Rivian (NASDAQ:RIVN) has proven recently that despite being an underdog in a space dominated by Tesla, great achievements are possible. While Tesla has posted delivery declines in the first quarter, Rivian beat first quarter delivery estimates, delivering 13,588 vehicles while the market had expected 12,415.
Strong demand for the luxury EV maker’s pickup trucks and SUVs are what drove deliveries higher in the first quarter. Rivian’s focus on the luxury segment of the EV market looked like it had been its downfall in 2022 and 2023 as inflation had hurt many consumers’ budgets. However, based on robust delivery numbers, that end-market is proving to be a bit stickier than previously thought.
Broader sectoral trends as well as news that Rivian would be shutting down its factory in Normal, Illinois for facilities upgrades haven’t helped its share price. RIVN has plummeted 50% on a YTD basis, despite having solid delivery and sales figures.
With a solid capital base, the luxury EV maker does have a chance to redeem itself and investors should certainly not count it out of the race.
EHang (EH)
The market of electric vertical take-off and landing (eVTOL) vehicles is an interest one. Urban transportation can take many forms, yet who knew an era of flying cars would be upon us so soon. EHang (NASDAQ:EH) is a China-based eVTOL aircraft startup that has not just been able to grow sales over the past few years but also increase profitability.
The startup plays in two different end-markets: consumer transportation and logistics. EHang’s flagship vehicle, the EH216-S, is getting all the press with airworthiness and production certificates from the Civil Aviation Administration of China (CAAC). The company claims the production certificate is the first to be granted in the entire global eVTOL market, making the development a great achievement.
Strong sales and deliveries growth in Q1 have helped shares to steadily rise from their lows in February and March. Entrance into new markets, especially the United Arab Emirates could serve as critical growth catalysts that could spur EHang’s earnings and stock price to surge.
On the date of publication, Tyrik Torres 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.
