Best Electric Vehicle Stocks To Buy

Best Electric Vehicle Stocks To Buy: Climate change is one of the most pressing issues of the 21st century, and both public and private sector leaders are focused on solutions. Electric vehicles top the list as an effective, achievable option for reducing emissions worldwide. 

Companies that were once exiled to the outskirts of the industry have become mainstream, and new partnerships are springing up between early-stage EV startups and established automakers to speed development along. 

Industry experts predict that electric vehicles will make up 10 percent of total passenger vehicle sales as early as 2025, and that figure will rise to 28 percent by 2030.

If current trends continue, electric vehicles are projected to hit 58 percent of total passenger vehicle sales by 2040. 

With that in mind, many investors are anxious to add EV stock to their portfolios, but it’s not always clear which companies are poised to lead this growing industry. There is a lot to consider when it comes to electric vehicles. The biggest issue is how those vehicles are powered. 

EV companies differentiate themselves from one another through battery-related technology, which is exceptionally complex. That makes it challenging for average investors to evaluate the advantages and disadvantages of various options. 

As if that wasn’t enough to make choosing EV stocks difficult, the news from this industry can be misleading. EV companies have had more than their share of scandals – for example, in September 2020, investors were shocked and alarmed to learn of allegations that EV truck company Nikola made fraudulent claims to drive share prices up. 

These types of issues make it tough to determine which companies can and will follow through on their promises. So which are the best electric vehicle stocks to buy? Here are six that look especially promising: 

Could Tesla Rise Another 300%?

While the rest of the world struggled through 2020, Tesla saw exceptional success.

It took nearly two decades, but the company finally delivered on its goal to make luxurious electric vehicles widely available.

Tesla aimed to get 500,000 cars into consumers’ driveways and garages by the end of 2020, and it very nearly succeeded. Along the way, stock prices rose from about $70 per share to well over $800 per share. 

Some investors and analysts believe 2021 will be another stellar year for Tesla, and share prices will rise another 300 percent – 500 percent.

Others think Tesla is overvalued, and current share prices might be as good as things get for now. Tesla’s $800+ billion valuation assumes it won’t hit any of the roadblocks common in the automotive industry, and there are plenty of experts that say the likelihood of Tesla avoiding all manufacturing obstacles is slim-to-none. 

With that said, the brilliant and ambitious Elon Musk still heads the company, and his plans go far beyond electric vehicles. Tesla is likely a solid long-term buy, though last year’s returns may not be repeated in 2021. 

Workhorse Group Targets Commercial Vans

One of the more interesting developments in the EV industry is that companies are starting to branch out. Some are focused on passenger vehicles, while others are looking at public transit, shipping, and everything in-between. 

Workhorse Group wants to corner the market on electric commercial cargo vans – the sort that carry packages from distribution centers to consumers’ homes.

In the industry, these are known as “last-mile” vehicles. Even more exciting – Workhorse may be one of the first to put unmanned drones into widespread use for deliveries. 

When news broke that Workhorse Group was in the running for a $6 billion contract with the US Postal Service, investors were quick to add this stock to their portfolios.

Overall, Workhorse Group stock went up 655 percent in 2020. However, share prices cooled off with the announcement that no final decision would be made on the USPS contract until 2021. 

Some analysts are concerned that Workhorse is a bit overvalued. Today’s lower prices may be a bargain when measured against the increases that are likely if the USPS contract goes through.

NIO Is The “Tesla” Of China

China is widely considered the largest auto market in the world, and Chinese EV maker NIO is ready to capture its share of sales.

The company is often compared to Tesla in its approach – it started by developing top-of-the-line luxury vehicles, and the plan is to reinvest profits from costlier models to create more affordable choices for average consumers. 

NIO has gotten creative in differentiating itself from competing EV brands. One of its biggest successes is a batteries-as-a-service (BaaS) program. The BaaS option decreases the initial cost of vehicles for consumers and increases the convenience of owning and maintaining an electric vehicle. 

Essentially, the program gives buyers a discount of approximately $10,000 if they purchase their NIO without a battery. Instead, they enroll in the BaaS program for approximately $142 per month, which automatically delivers a 70-kWh battery monthly. 

Most analysts believe that NIO’s share prices will follow in Tesla’s footsteps, given the similarities between the companies. That, in addition to NIO’s innovative approach to electric vehicle design and delivery, has made NIO popular with investors.

Fisker Sidesteps EV Manufacturing Challenges

Some analysts have ranked Fisker as their number one pick among EV stocks, based almost entirely on the company’s unique strategy. Unlike its competitors, Fisker is all about the ideas.

It is focused on designing the world’s best electric vehicles, but it doesn’t intend to get bogged down with manufacturing them.

Instead, it is leaving the manufacturing process to those with more experience – and that means no need to invest in the facilities, technology, and workers necessary to build cars. 

In another break with EV tradition, Fisker isn’t going all-in on vehicle sales – though it could, given that Fisker has some of the most affordable EVs available.

The company has indicated it plans to prioritize its leasing program, which is good news for consumers who aren’t quite ready to commit to other-than-gasoline options. The leasing program is likely to include maintenance, service, and up to 30,000 miles of driving at a price point that makes sense for average consumers. 

Fisker vehicles won’t be ready for the road until late next year, so investors who buy now are taking a chance. While Fisker stock is as risky as any other EV investment, some analysts are convinced that the risk is reduced without the issues associated with manufacturing.

Hyliion Holdings Isn’t Making Money Yet

It’s not an exaggeration to say that trucks keep the economy going. More than 15 million trucks are on the road in the United States, and at least two million of those are tractor-trailers.

Hyliion Holdings wants to reduce – and eventually eliminate – emissions from this industry by developing alternative fuel options, including electric trucks. 

For the moment, Hyliion isn’t making any money, but some analysts believe that state is just temporary, in part because Hyliion has demonstrated its ability to innovate in other areas.

Hyliion offers advanced features that include an algorithm capable of evaluating the rig’s energy capture and application needs based on a measure of approaching road conditions.

Software updates occur automatically, no matter where the vehicle is located, which ensures drivers always have the most up-to-date technology. 

Certainly, Hyliion is somewhat higher-risk than others on this list given the current state of its finances, but interested investors may determine that the potential rewards make the risk worthwhile. For the moment, Hyliion is leading the market in eco-friendly tractor-trailer trucks. 

ElectraMeccanica Solo Car Could Lead To Stock Pop

As with other EV stocks, ElectraMeccanica shares enjoyed a nice bump in 2020. Overall, share prices increased by 188 percent, thanks in large part to the popularity of just one model. 

The ElectraMeccanica vehicle that captured consumers’ attention is its three-wheeled single passenger Solo car. The Solo is designed for commuters who travel to and from work alone, racking up gas charges and maintenance bills along the way. 

The Solo has a 100-mile range, it is compatible with universal chargers, and it takes just three hours to reach full power.

Better still, according to ElectraMeccanica, the Solo has reduced the number of parts by 99 percent. That means fewer parts that will wear out or break, limiting downtime for car maintenance. 

ElectraMeccanica stock currently trades under $10 per share, and it might not skyrocket right away. However, if the Solo goes mainstream and the company sees strong growth, investors stand to realize impressive returns.

Best Electric Vehicle Stocks to Buy: The Bottom Line 

Investors who didn’t buy EV stocks in 2019 are a bit gloomy about missing the stunning returns of 2020. However, this industry certainly isn’t going to plateau anytime soon.

While individual stocks may stall if the market determines they are overvalued, others are sure to climb in coming months. These six are analysts’ picks for the best electric vehicle stocks to buy in 2021. 

 

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.