In the race to electrify the automotive world, picking the top EV stocks to buy is pivotal for investors looking to capitalize on the sector’s explosive growth.
Despite near-term hurdles such as competition and supply chain challenges, a few businesses have effectively weathered those challenges. With EV penetration accelerating, these frontrunners are poised for significant long-term expansion. All also present a golden opportunity for those with an eye on the future.
Moreover, the EV market is on an impressive climb. In fact, it’s aiming for a staggering $906.7 billion valuation by 2028, with a yearly growth rate of 9.82%. Additionally, while some new entrants may struggle financially, a few standout firms are poised for significant long-term value creation. With that said, here are seven EV stocks to buy, known for their innovative approaches and resilience.
Li Auto (LI)
One of the top EV stocks to buy is Li Auto (NASDAQ:LI). At the moment, the Chinese EV giant is revolutionizing the Asian market, with its stock rising an impressive 50.4% over the past year. This surge is bolstered by the launch of Li Auto Mega, an all-electric multi-purpose vehicle (MPV). This MPV combines spaciousness and state-of-the-art technology, underscoring LI’s ambition to redefine the luxury family MPV segment.
Moreover, LI’s strategy to expand its electric model lineup from four to an impressive 11 by 2025 and its plans to build 3000 high-speed supercharging stations across China showcase its commitment to growth while laying a solid foundation for its future endeavors.
Financially, the firm reported a sales increase of 128.12% year-over-year (YOY) and a net income surge of a staggering 2,068.2% YOY. With 376,030 vehicles delivered in 2023, marking an 182.2% bump, Li’s financial health remains excellent and robust. TipRanks analysts are taking note, assigning LI a ‘strong buy’ rating with a predicted 47.90% upside potential, highlighting the firm’s strong market position.
General Motors (GM)
Another one of the top EV stocks to buy is General Motors (NYSE:GM), which is on a path to resurgence, showing remarkable resilience amid challenges. Despite a $1.1 billion setback from the United Auto Workers strike, GM recovered, marking a notable 14% rise in its stock price year-to-date (YTD). This recovery is underscored by its ambitious $35 billion investment plan by 2025, aimed at turning key sites into electric vehicle production powerhouses.
Adding to its electrification strategy, GM is reintroducing plug-in hybrid options, acknowledging the significance of a transitional strategy as the national charging infrastructure develops. Moreover, this approach complements Tesla’s (NASDAQ:TSLA) Supercharger network expansion, positioning GM to leverage the growing demand for electric mobility effectively.
Financially, GM is in a formidable position. It boasts revenues of $43 billion, which surpassed expectations by $3.51 billion, and earnings-per-share (EPS) of $1.59, outperforming forecasts by 43 cents. With TipRanks analysts assigning GM a ‘moderate buy’ rating and a 22.84% upside potential.
Toyota Motor (TM)
Despite the CEO’s controversial stance on EV investments, Toyota Motor (NYSE:TM) technically stands out as an excellent investment in the space.
In 2023, it sold nearly 3.7 million electric and hybrid vehicles, marking a 35% bump YOY, demonstrating its strong foothold in green mobility. Moreover, its commitment is further solidified by its groundbreaking development in solid-state EV batteries, promising a 750-mile range and 10-minute charging.
Also, its acquisition of Primearth EV Energy from Panasonic (OTCMKTS:PCRFY) enhances the automotive titan’s capabilities in mass-producing diverse EV batteries, positioning it to meet the surging demand effectively.
Financially, Toyota reported a doubled profit in the third quarter, with a 23% increase in revenue YOY. This exceptional financial health has earned it a ‘strong buy’ rating from Quant analysts, further solidifying its position as a frontrunner in the automotive space.
Ford Motor (F)
Ford Motor (NYSE:F) is on a robust upswing, with its share price climbing 5% YTD. As the leading global automaker in the annual leaderboard report for equitable and sustainable supply chains, the automotive giant has ascended from its previous second-place ranking.
Moreover, Ford electrifies its strategy by announcing seven new all-electric vehicles, set to hit Europe by 2024. The expansion of Ford’s Transit range with four new electric models, coupled with exclusive access for Ford customers to Tesla Superchargers in the U.S. and Canada, signals a game-changing move in the EV sphere.
Furthermore, Ford shines on the financial front with a reported revenue of $46 billion, a 4% increase YOY, and the automaker’s forward-looking stance, expecting an adjusted EBIT of $10 billion to $12 billion. This optimism, coupled with an 18% increase in EV sales YOY and a significant surge in hybrid sales reaching over 40%, reflects Ford’s promising momentum.
Panasonic Holdings (PCRFY)
Panasonic Holdings has become a key player in the EV revolution. It boosted its stock price by 7.61% over the past year through a shift towards electrification and renewable energy. Aiming for a zero-CO2 society, the company leads with cutting-edge EV devices and green hydrogen production technology. This dedication cements Panasonic’s leadership in sustainability.
Further solidifying its commitment to environmental protection, Panasonic unveiled the Green Impact Plan 2024. This initiative focuses on tangible steps for reducing carbon dioxide emissions, aiming to foster avoided emissions in society. Through these efforts, Panasonic reinforces its reputation as a forward-thinking conglomerate.
On the financial front, Panasonic’s performance is equally impressive. It reported revenue of $14.7 billion, surpassing estimates by $498.16 million, and EPS reaching 32 cents, beating forecasts by 10 cents. This robust financial health, coupled with a ‘strong buy’ consensus from Wall Street analysts and a projected upside potential of 41%, underscores Panasonic’s solid market position.
Albemarle (ALB)
Albemarle (NYSE:ALB), a global leader in lithium production, has captured the market’s attention with its pivotal role in the surging demand for EV batteries. This has propelled its share price upward by an impressive 20% in the past month. This uptick reflects a vigorous recovery, countering the previous downtrend in lithium prices affecting the stock.
Moreover, the company’s strategic move to scale back capital expenditures between $1.6 billion and $1.8 billion from $2.1 billion underlines its commitment to financial prudence and operational efficiency.
Financially, Albemarle shines with a quarterly revenue of $2.36 billion, exceeding forecasts by $177.13 million and achieving a 31% annual revenue growth driven by a 21% volume increase. This financial success, combined with a ‘moderate buy’ rating from TipRanks analysts, signaling a 25.16% upside, indicates a bright future for ALB, making it an attractive choice for investors.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) is capturing the spotlight in the lithium market and EV landscape, backed by its Thacker Pass project in Nevada. The project’s feasibility study reveals its massive potential, promising an annual production of 80,000 tons of lithium carbonate equivalent over an impressive 40-year lifespan. This positions LAC as a key figure on the global stage, with the Thacker Pass deposit’s size marking a significant geopolitical advantage.
Adding to the project’s allure, General Motors has thrown considerable weight behind Thacker Pass, with a hefty $650 million investment and a ten-year offtake agreement. This backing highlights the strategic importance of LAC’s role in the evolving electric vehicle ecosystem.
Furthermore, LAC’s projected average annual EBITDA of $1.1 billion starkly contrasts its current market cap of around $878 million, suggesting a notable undervaluation of its stock. The company presents an enticing investment opportunity, with TipRanks analysts assigning LAC a ‘moderate buy’ rating and predicting a substantial 72.3% upside.
On the date of publication, Muslim Farooque 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