7 Electric Vehicle Stocks Worth Holding Until 2030
The performance of electric vehicle stocks has been a mixed bag this year. From deeply oversold levels, Tesla (NASDAQ:TSLA) stock surged by 137% during the year. On the other hand, Lucid Group (NASDAQ:LCID) stock, touted as a Tesla killer, declined by 30%. This does not come as a surprise as the markets separate the winners from the potential laggards in an intensely competitive EV industry.
It’s also worth mentioning that amidst near-term challenges, the outlook for the industry remains positive. EV adoption is likely to increase globally through the decade. This also implies that there will continue to be value creators among EV stocks.
The focus of this column is on seven electric vehicle stocks to buy that are worth holding until 2030. I believe that these companies will continue to grow at a healthy pace backed by innovation or quality assets. Let’s discuss the specifics that back my bullish view on these EV stocks.
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Tesla (TSLA)
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Tesla has proved all naysayers wrong and has been a massive value creator. Considering the industry growth potential globally, I believe that TSLA stock can be a multibagger even from current levels. It’s therefore among the best electric vehicle stocks to hold until 2030.
If there was a single reason to be bullish on Tesla, I would say that it’s innovation. For the first nine months of 2023, the company has invested $2.9 billion in research and development. It’s the R&D factor that’s likely to keep Tesla ahead of its peers.
Further, Tesla has brand pull and its marketing expenses are lower than traditional automakers or other EV companies. With operating leverage, Tesla has become a cash flow machine. For the first nine months of 2023, Tesla reported operating cash flow of $8.9 billion. Further, as of September, the company reported $26 billion in cash and equivalents.
The company’s ambitious global expansion plans will be supported considering the financial flexibility. It’s likely that in the next few years, Tesla will be setting up multiple new factories. In the foreseeable future, Cybertruck and Roadster are likely to be in the limelight.
Li Auto (LI)
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Li Auto (NASDAQ:LI) stock has trended higher by 64% for year-to-date. This rally has been backed by deliveries growth and increasing free cash flows. I believe that Li Auto will continue to create value and is among the best Chinese EV companies.
I like the fact that Li Auto continues to focus on China rather than looking at geographic diversification too early. The company is working strategically to increase its market share in new tier one and tier two cities. In the Chinese SUV market above RMB300,000, the company has 50% market share in well-developed cities. However, the market share is only about 20% across all Chinese markets. With aggressive retail expansion and continued launch of new models, the market share is likely to increase. Li Auto is also looking at increasing their presence in third tier cities. This will help in boosting growth.
On a strategic level the company is investing in R&D to achieve their goal of providing autonomous vehicles. Investments in R&D is expected to develop technology and products to support long term growth plans. A cash buffer of $12.13 billion as of Q3 and robust cash flows provide flexibility to invest in innovation and product development.
Panasonic Holdings (PCRFY)
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Among EV battery companies, Panasonic Holdings (OTCMKTS:PCRFY) looks attractive for multiple reasons. First, PCRFY stock trades at a forward price-to-earnings (P/E) ratio of 8. Valuations are attractive and the stock offers a dividend yield of 2.3%.
Further, Panasonic Holdings has ambitious growth plans through 2031. This involves the setup of multiple new factors to boost EV battery production capacity. Overall, the target is to quadruple capacity to 200GWh as compared to the last financial year. This is likely to translate into healthy revenue and cash flow upside.
To put things into perspective, Panasonic expects revenue of 2.5 trillion yen by financial year 2031. This will be associated with an improvement in EBITDA margin. From an innovation perspective, Panasonic expects to increase battery density. At the same time, the company is working on solid-state batteries for drones that are likely to be commercialized by 2029. Given these plans, I am bullish on PCRFY stock for multibagger returns.
Albemarle Corporation (ALB)
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Albemarle Corporation (NYSE:ALB) is a provider of specialty chemicals globally. The lithium business is however the key value creator and with growing demand from the EV industry, I am bullish on ALB stock.
It’s worth noting that the stock trades at a deep valuation gap. At a forward P/E of 7, the stock seems poised for a sustained rally. Further, ALB stock offers a dividend yield of 1% and I expect healthy dividend growth in the coming years.
In terms of growth, Albemarle reported lithium conversion capacity of 200ktpa in 2022. The company expects to increase capacity to 600ktpa by 2027. If this is associated with an upside in lithium, Albemarle will deliver stellar revenue growth and cash flow upside.
I must add that the company has a strong balance sheet. The company is looking at potential acquisitions as a growth strategy. This is another potential catalyst for value creation.
Lithium Americas (LAC)
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Lithium Americas (NYSE:LAC) is another lithium stock that looks massively undervalued. Considering the asset base, I believe that LAC stock can potentially deliver 10x returns by 2030.
As an overview, the company is a lithium miner and holds 100% interest in the Thacker Pass project in the United States. The Thacker Pass project holds the largest measured and indicated lithium resource in the United States. The asset has an after-tax net present value of $5.7 billion with an average annual EBITDA potential of $1.1 billion and a mine life of 40 years. Considering this, the current market valuation of Lithium Americas at $1 billion looks miniscule.
From a project financing perspective, General Motors (NYSE:GM) is investing $650 million. GM also has an 100% offtake agreement for phase one production for 10 years. With all these positives, it’s just a matter of time before LAC stock skyrockets.
Blink Charging (BLNK)
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Blink Charging (NASDAQ:BLNK) is an attractive pick from EV charging infrastructure names. BLNK stock has rallied by 18% in the last one month and I expect the positive momentum to sustain.
One reason for being positive going into next year is the point that the company has guided for positive EBITDA by December 2024. At the same time, the company has continued to report stellar revenue growth. For Q3 2023, Blink reported revenue growth of 152% on a year-on-year basis to $43.4 million. For the quarter, the company has sold or deployed 5965 chargers.
In the coming quarters, fast DC chargers will add higher value to the revenue mix. It’s worth noting that the low capex investment related to L2 nature of installation reduces the operating cost considerably. This gives Blink Charging a competitive advantage to offer service at a lower cost.
Moreover, by 2030 the demand for EV chargers would increase and more than 30 million. Of this, 90% chargers are expected to be Level 2 chargers. Blink is well positioned to capitalize on growing demand based on its expertise to utilize L2 installation at a low cost.
Solid Power (SLDP)
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Solid Power (NASDAQ:SLDP) is among the penny electric vehicle stocks that I would hold in my portfolio. Of course, the risk is high, but if the company can commercialize solid-state batteries, returns would be multibagger from current levels of $1.5.
In terms of positive business development, Solid Power made its first A-1 EV cell deliveries to BMW (OTCMKTS:BMWYY) to formally enter automotive qualification. Ford (NYSE:F) is also an investor and automotive partner. Potential validation from these automotive companies is likely to translate into SLDP stock surging higher.
It’s worth mentioning that the company has licensed its cell design and technology to BMW for parallel research and development. This can possibly help in accelerating the commercialization. Big names being associated with the company also provides a sense of comfort when considering long term exposure. Further, with a strong cash buffer of $422 million, I don’t see any equity dilution concerns for the next 12 to 18 months.
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On the date of publication, Faisal Humayun 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.
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