13 Most Promising EV Stocks According To Hedge Funds
In this piece, we will take a look at the 13 most promising EV stocks according to hedge funds. If you want to skip our overview of the electric vehicle industry, then you can take a look at the 5 Most Promising EV Stocks According To Hedge Funds.
The 21st century has bred several new industries that have reshaped our way of life. Courtesy of advances in computing and the Internet, communications, entertainment, and work are significantly different in 2023 when compared to just two decades back. Similarly, mass production and industrial engineering coupled with the prowess of Tesla, Inc. (NASDAQ:TSLA) has also made electric vehicles quite common.
In fact, Tesla's success and the resulting market saturation through products offered by both traditional car manufacturers such as Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) and new electric vehicle companies such as Li Auto Inc. (NASDAQ:LI) and NIO Inc. (NYSE:NIO) to introduce countless new EVs in the market. This has led to the market blossoming, with data from the International Energy Agency (IEA) showing that 2022 was another record year for the EV industry. This is despite the fact that EV stocks, which are high growth and high risk due to less established manufacturing capacity and less market share, were pummeled as investors fled to safety in a high rate environment and consumers felt the inflationary pinch.
Just how record setting was 2022? Well, according to the IEA EV sales grew by 55% in 2022 at a time when the broader automotive industry contracted by 3%. In total, ten million electric cars were sold globally in 2022 - a figure that led to 26 million cars roaming the roads for a 60% annual jump. Within this growth, the most popular electric vehicles were battery EVs, which are those that solely rely on their batteries to power up the car. BEVs accounted for 70% of all the EVs on the road, and the growth was in line with the average historical growth. This is a crucial insight since it shows that the considerable global demand for electric vehicles was sufficiently robust to ensure a quick recovery after the devastation ushered in by the coronavirus pandemic.
This robust demand also means that the EV sector is estimated to be one of the fastest growing industries that you're likely to come across. For instance, research shows that the EV market was worth $163 billion in 2020 and is expected to grow at a compounded annual growth rate (CAGR) of 18.2% to be worth $823 billion by 2030 end. A double digit growth rate is anything that anyone can hope for really, but a key caveat for the EV industry is that even though millions of vehicles are on the roads, there is inadequate charging infrastructure to ensure long trips. Conventional cars have had decades for companies such as TotalEnergies SE (NYSE:TTE) to set up gasoline pumps in nearly every area imaginable. However, the charging infrastructure industry is quite nascent but it is going through some developments that could overcome these constraints.
To meet this demand, data from PricewaterhouseCoopers (PwC) outlines that the EV charging infrastructure segment will undergo 'hockey stick' growth where it suddenly peaks. Talking raw numbers, according to PwC, chargers in the U.S. will grow from four million in 2022 to 35 million by 2030 end. For more details on this front, you can check out 11 Best EV Stocks For The Long Term.
Charging infrastructure for electric vehicles is in fact the hottest topic in the electric industry right now. 2023 has seen Tesla's North American Charging Standard (NACS) being adopted by EV manufacturers far and wide. As of August 2023, 26 companies have adopted Tesla's NACS and several states have drafted laws to ensure that Tesla's chargers are included in charging stations.
With these details in mind, let's take a look at some electric vehicle stocks that are promising according to hedge funds. Some top stocks are Ford Motor Company (NYSE:F), Tesla, Inc. (NASDAQ:TSLA), and Aptiv PLC (NYSE:APTV).
A lithium battery recharging a fleet of electric vehicles in a parking lot.
Our Methodology
To make our list of the most promising EV stocks according to analysts, we used the holdings of KraneShares Electric Vehicles and Future Mobility ETF and ranked them by the number of hedge fund investors during Q3 2023. Out of these, the top EV stocks were chosen.
13 Most Promising EV Stocks According to Hedge Funds
13. ChargePoint Holdings, Inc. (NYSE:CHPT)
Number of Hedge Fund Investors In Q3 2023: 16
ChargePoint Holdings, Inc. (NYSE:CHPT) is one of the largest electric vehicle charging infrastructure companies in the world. Like other EV stocks, its shares soared in December 2023 after the Fed signaled that the current interest rate era might be over.
By the end of this year's third quarter, 18 out of the 910 hedge funds covered by Insider Monkey's research had invested in ChargePoint Holdings, Inc. (NYSE:CHPT). Just like Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and Aptiv PLC (NYSE:APTV), it is a top EV stock according to hedge funds.
12. Lucid Group, Inc. (NASDAQ:LCID)
Number of Hedge Fund Investors In Q3 2023: 18
Lucid Group, Inc. (NASDAQ:LCID) is an American electric vehicle company known for its high end luxury electric vehicles. Its shares have bled 23.6% on the market this year after less than stellar production and poor brand recognition were significant headwinds at a time when the EV sector as a whole is reeling from inflation and high interest rates.
Insider Monkey scoured through 910 hedge fund holdings for 2023's third quarter and found 18 Lucid Group, Inc. (NASDAQ:LCID) shareholders.
11. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Investors In Q3 2023: 18
NIO Inc. (NYSE:NIO) is a Chinese electric vehicle company headquartered in Shanghai, China. December is proving to be a great month for the firm as its shares are soaring after a $2.2 billion cash infusion from the Abu Dhabi government's special investment vehicle.
Insider Monkey dug through 910 hedge funds for their September quarter of 2023 shareholdings and found 18 NIO Inc. (NYSE:NIO) shareholders. Out of these, the firm's largest shareholder was Jim Simons' Renaissance Technologies as it owned 4.1 million shares that are worth $37.9 million.
10. Livent Corporation (NYSE:LTHM)
Number of Hedge Fund Investors In Q3 2023: 24
Livent Corporation (NYSE:LTHM) is a backend electric vehicle company that provides batteries that are used in electric vehicles. The firm expanded its battery production capacity by acquiring a minority stake in a firm whose technology enables more efficient lithium mining.
During Q3 2023, 24 out of the 910 hedge funds surveyed by Insider Monkey were the firm's investors. Livent Corporation (NYSE:LTHM)'s biggest hedge fund shareholder is Zilvinas Mecelis's Covalis Capital due to its $14.1 million stake.
9. MP Materials Corp. (NYSE:MP)
Number of Hedge Fund Investors In Q3 2023: 26
MP Materials Corp. (NYSE:MP) is a rare earth metals mining company headquartered in Las Vegas, Nevada. These metals are crucial for manufacturing EVs, and given the geopolitical tensions between the U.S. and China which has seen Beijing threaten to limit rare earth metal exports, this EV stock is particularly worth watching out for.
By the end of this year's third quarter, 26 out of the 910 hedge funds profiled by Insider Monkey had bought and owned MP Materials Corp. (NYSE:MP)'s shares. Daniel Gold's QVT Financial was the largest investor as it owned $74.5 million worth of shares.
8. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Investors In Q3 2023: 26
Plug Power Inc. (NASDAQ:PLUG) is a hydrogen fuel systems developer seeking to deploy its products in vehicles. It has been one of the worst performing EV stocks this year after its going concern status was put in question and sluggish government progress on Plug Power Inc. (NASDAQ:PLUG) being able to receive tax credits.
Insider Monkey's September quarter of 2023 survey covering 910 hedge funds revealed that 26 were the firm's shareholders. Plug Power Inc. (NASDAQ:PLUG)'s biggest shareholder in our database is Israel Englander's Millennium Management courtesy of its $25.7 million investment.
7. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Investors In Q3 2023: 27
SolarEdge Technologies, Inc. (NASDAQ:SEDG) is a solar power equipment provider that also sells electric vehicle charging equipment. The firm's shares have had a rough ride this year, as while high interest rates decimated the stock, it soared after the Fed signaled that rate hikes might be over.
After digging through 910 hedge fund portfolios for this year's third quarter, Insider Monkey discovered that 27 had invested in SolarEdge Technologies, Inc. (NASDAQ:SEDG). Ian Simm's Impax Asset Management was the largest stakeholder since it held a $121 million stake in the company.
6. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Investors In Q3 2023: 28
Li Auto Inc. (NASDAQ:LI) is a Chinese electric vehicle company headquartered in Beijing, China. 2024 should be an important month for the firm since it is aiming to upgrade its electric vehicle portfolio by starting the mass production of its first pure electric vehicle in February.
As of September 2023 end, 28 out of the 910 hedge funds covered by Insider Monkey's research had bought a stake in the company. Li Auto Inc. (NASDAQ:LI)'s biggest hedge fund investor is Jim Simons' Renaissance Technologies due to its $324 million stake.
Ford Motor Company (NYSE:F), Li Auto Inc. (NASDAQ:LI), Tesla, Inc. (NASDAQ:TSLA), and Aptiv PLC (NYSE:APTV) are some promising EV stocks according to hedge funds.
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Disclosure: None. 13 Most Promising EV Stocks According to Hedge Funds is originally published on Insider Monkey.
