The 3 Top EV Stocks Growth Investors Should Be Focused on Right Now
EV stocks could offer significant gains amid a bull market, outperforming other tech stocks with stretched valuations. This sector’s consistent and robust growth potential makes it resilient to different market conditions and cycles. So, many investors have been loyal to this space over the past decade.
Yet, the EV sector is moving beyond Tesla (NASDAQ:TSLA) as a one-horse race. A myriad of competitors stand ready to take market share and witness outsized growth.
Plenty of promise in this sector abounds. And, a large portion of all international vehicles sales will be electric vehicles by 2030 (the majority, according to some estimates). Therefore, we’re going to need a lot of lithium and other raw materials to support this growth.
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Thus, let’s dive into three EV and EV-related stocks worth considering now.
BYD Co. (BYDDF)
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BYD Co.’s (OTCMKTS:BYDDF) journey to becoming one of the most sought-after EV manufacturers was not a smooth ride. Initially coming to market as a battery maker, BYDDF shifted to making cars in 2003, a move that startled a lot of investors and experts.
However, this move has proven to be the right choice. Recently, BYD surpassed Tesla in EV car sales. Currently expanding more globally, the company is poised for continued long-term growth.
Now, 2023 was a massive success for BYD Co. as it achieved a massive milestone of 1.6 million EV deliveries. This represented a 73% surge from 2022. Its affordable models, like the Atto 3 and Seal sedan, are gaining traction globally. Creating expansions worldwide, BYDDF is a threatening competitor to other global EV manufacturers.
Also, BYD Co. revealed plans to collaborate with Korean institutes to introduce EVs in Korea. The Korean Economic Daily reported that environmental and safety certifications are prerequisites, including range and battery safety. BYDDF’s Atto 3 will likely debut as its first EV model, following a sales record overseas.
Presently, the stock trades at 17-times earnings, what I would consider to be a relative bargain considering the company’s impressive growth potential.
Lithium Americas (LAC)
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Initially known for its lithium assets in Nevada and Argentina, Lithium Americas (NYSE:LAC) is a stock investors shouldn’t underestimate.
Despite being early in its development cycle, with production slated for 2026, LAC stock remains undervalued. Analysts project substantial long-term growth potential, foreseeing a surge in value amid changing demand dynamics and rising lithium prices.
Amid global EV growth, the American market shows slow acceptance. Lithium Americas eyes profits from North American EV battery expansion. Despite a 60% one-year loss, optimism remains. In 2022, battery-grade lithium carbonate hit record highs but has since stabilized. Forecasts anticipate doubling demand by 2030.
Although the stock declined 36% year to date (YTD) amid negative lithium sentiment, long-term bullishness remains due to the company’s asset potential. General Motors (NYSE:GM) is a strategic partner, investing $650 million with a ten-year offtake agreement for phase one production, ensuring cash flow visibility. Plus, with a market cap of $743 million, the company focuses on lithium mining and production, positioning it well for the rising demand for EV batteries over time.
Li Auto (LI)
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Another growth-oriented EV stock every investor should consider is Li Auto (NASDAQ:LI). Despite declining in the latter half of 2023, its strong January 2024 comeback is achieving an impressive deliveries growth of 105.8%. With an ambitious goal of 800,000 annual deliveries and the upcoming Li MEGA launch in March, accelerated growth is anticipated.
Its flagship Li L7 model competes directly with Tesla’s Model Y, offering electric and gasoline power versatility. Despite a 17% dip in 2024, Li Auto’s strong growth in 2023, with total deliveries surpassing 600,000 vehicles, suggests significant potential in China’s EV market.
Boasting a presence in 142 cities and 474 retail stores, continued penetration in China supports market share expansion. With $12.13 billion in cash and strong free cash flows, LI has ample resources for aggressive expansion and innovation.
On the date of publication, Chris MacDonald 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.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.
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