Best EV Stocks To Buy Now in 2022: Top Electric Car Companies To Invest In
In early 2022, as gas prices rose, electric vehicle registrations also surged. New EV registrations totaled 158,689, or 4.7% of all new car registrations in the U.S., according to data from Experian reported by Automotive News. This growth is promising for those looking to invest in the industry.
See: 5 Things You Must Do When Your Savings Reach $50,000
What Are Good EV Companies To Invest In?
A look at sales totals on EVs in the U.S., with Tesla’s four models dominating the top 10 list, can point you in the right direction. Especially after the stock’s split in August 2022, Tesla could be one of the best values in EV stocks if you’re looking for a long-term investment.
But there are many other EV stocks also showing promise right now, encompassing both domestic and international EV manufacturers and one conventional auto manufacturer heavily vested in EVs. Also included below is one EV ETF for more risk-averse investors seeking to invest in the EV market while maintaining a diversified portfolio.
How To Identify the Best EV Stocks To Buy Now
When you’re evaluating EV stocks, as with stocks in any industry, it’s important to look at the company’s growth potential vs. its current value. Look at the company’s cash reserves, profitability and other fundamentals.
Tesla (TSLA)
Tesla is the undisputed industry leader when it comes to electric vehicle sales in the U.S. in recent years, with 64% of EV sales in the third quarter of 2022, according to Electrek.
Trading at $160.95 on Dec. 13, Tesla represents a tremendous value. Analysts give Tesla an average 12-month target of $263.11, with a high estimate of $536 and a low of $24.33. Tesla stock has remained a “buy” among the majority of analysts for several months, and Citigroup recently upgraded its recommendation from sell to neutral.
Ford Motor Company (F)
A legacy automotive manufacturer with a solid history, Ford trails behind Tesla in EV sales by orders of magnitude. Even so, the Ford Mustang Mach-E, which hit showrooms in December 2020, was ranked the third best-selling EV, right behind Tesla’s affordable Model Y and Model 3 cars, in 2021. Ford’s F-150 Lightning all-electric pick-up truck also shows promise, especially since Tesla has yet to deliver on its much-publicized — and highly anticipated — Cybertruck.
Facing supply chain struggles and inflation, Ford delivered a lackluster quarterly report for the third quarter of 2022, which caused the stock to plummet. Closing at $13.57 on Dec. 13, the stock has a consensus price target of $17.91. It yields dividends of 4.42%, which can make it desirable for investors seeking income from stocks they hold. According to MarketBeat, the stock has 7 “buy” ratings, 8 “hold,” and only three analysts recommend you sell now.
Nio (NIO)
Nio, a Chinese EV manufacturer specializing in luxury, autonomous vehicles, was recently named “top China EV pick,” by a Deutsche Bank analyst.
The recent launch in China of the midsize ET5 electric sedan, along with the release of the ET7 full-size sedan and the ES7 electric SUV in 2022, has created positive vibes for the company amongst investors. The existing ES6, ES8, and EC6 continue to garner strong sales in China. These models are expecting upgrades over the following year, which will also bode well for sales.
NIO is not yet profitable, but its revenues have climbed in each of the last four quarters. It’s still down 58% since the beginning of the year, putting it firmly in “buy” and “hold” territory.
XPeng (XPEV)
NIO’s main rival in China is XPeng Motors, which produces the G3 SUV and P7 four-door sports sedan. In the first eight months of the year, XPeng’s sales jumped 96% year-over-year, compared to NIO’s third-quarter sales increase of 28%. Given supply chain challenges and growing competition, this is nearly phenomenal growth for both companies.
From an investor’s standpoint, there is a lot to like right now about XPeng. Deliveries on the new G9 SUV, which the company is claiming to be “the world’s fastest charging EV,” according to Electrek.co, began in September.
In spite of the company’s promising future, shares have fallen nearly 80% since the beginning of the year. Chairman and CEO He Xiaopeng increased his stake with a $30 million purchase of shares. Trading for just under $15 on Sept. 26, 2022, and rising after Xiaopeng’s purchase, XPeng was down to $10.31 on Dec. 13. It has a moderate buy rating and an average price target of $15.04.
ChargePoint (CHPT)
With 30,000 charging station locations, ChargePoint is the largest and most open electric vehicle charging network in the world. It currently operates in 13 countries, including across the U.S. and Europe. ChargePoint has delivered 145 million charges, according to its website.
Even so, ChargePoint stock has stayed below $15 lately, well below its 52-week high of $20.99. SeekingAlpha recently said the company has a “long runway for growth,” however, which means you’ll be getting shares “on sale” right now. The stock is recommended for growth investors with a long-term horizon. And, if you follow the investment advice of Warren Buffet, you don’t want to hold any stock for 10 minutes that you wouldn’t hold for 10 years.
That longevity is one element that makes the EV market so enticing. And ChargePoint is one to buy or hold, right now, in the eyes of investors. MarketBeat analysts give it a “moderate buy” rating, with 10 analysts saying buy and another 3 saying hold. It has a consensus price target of $20.81 and plenty of room for growth.
iShares IDRV ETF
If you’re interested in investing in the EV market but prefer to steer clear of taking a chance on one company, an ETF is a way to build a diversified portfolio around a strong and rapidly growing industry. Save time and avoid sifting through all the options of EV manufacturers, EV charging station suppliers and companies that create components like batteries or chips with an exchange-traded fund like IDRV, instead.
IDRV from iShares tracks the stocks of companies that stand to benefit from growth and innovation in and around electric vehicles, battery technologies and autonomous driving technologies. Its holdings are diversified across 142 companies, including Apple, Eaton, Nvidia, Toyota and Mercedes-Benz.
U.S. News & World Report gives IDRV a high-ranking in the industrial sector, calling it a “Best Fit” fund in the category. The fund has net assets of $436,108,661 and was trading at $37.92 per share when the market closed on Dec. 13.
Why Invest In an EV Stock?
EV stocks are appealing for their growth potential, as well as to investors seeking to support sustainable companies. Stock investing should not be an emotional play, but it is fun to invest in brands you believe in and, in nearly every case, EV manufacturers are seeking to build a better, more eco-friendly world with their technology solutions.
How To Get Started Investing in EV Stocks
Once you’ve done your research on your favorite EV companies, as well as those showing promise in the industry and in related industries, you can purchase shares through an app from almost any stock brokerage.
Pay attention to the fees and commissions they charge, as well as account minimums, when you choose a brokerage. Many stock trading apps offer commission-free trading. If you are interested in ETFs or foreign stocks, you’ll want to make sure you can trade those on the platform you choose, as well.
Investing in EV stocks is a way to support future sustainability efforts while building a portfolio with plenty of room for growth.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Dec. 13, 2022, and subject to change.
This article originally appeared on GOBankingRates.com: Best EV Stocks To Buy Now in 2022: Top Electric Car Companies To Invest In
