5 Best EV Stocks To Buy Now

Around the world governments are enacting laws to outlaw traditional gasoline powered cars by 2035. The opportunity for electric vehicles has never been brighter, bigger, or more lucrative.

These regulations will create new demand among consumers to switch from old-school gas guzzlers to more energy efficient ones.

All that spending power will translate to billions of dollars that a select number of companies from auto manufacturers to battery makers will profit from. Here are fiver of the best EV stocks to buy now.

Nio Analyst Estimates Crushed

Nio has been smashing Wall Street expectations lately after the Shanghai-based EV manufacturer posted its latest earnings report earlier this month.

Sales figures for Q4 2020 were up 130% year-on-year at $946.2 million, with revenues above $1 billion growing even faster at 133%.

Vehicle deliveries topped 17,000 for the quarter, representing a sequential 42% increase for the company, and with the rollout of its EC6 electric coupe SUV, the firm has been able to slash R&D expenditure and get gross margins from negative 8.9% last year to positive 17.2% this time round.

And yet, despite the good news on the financial front, Nio has seen its share price take something of a roller-coaster ride this year. Stiff competition in the Chinese EV market and a global semiconductor shortage has taken its toll on Nio’s valuation.

Indeed, production at its JAC-NIO manufacturing plant in Hefei has been temporarily halted due to the chip shortage problem, and Q1 2021 vehicle production estimates have been ramped down. Profits have also been hit, mainly from the perfect storm of a weak dollar coupled with a strong yuan eroding bottom line numbers.

But the negative sentiment in Nio stock at the moment could be a boon for investors. Share prices are down a third from 2021 highs, and a long-term bet on this company right now could pay big returns two or three years down the line. 

Workhorse Group May Partner With Amazon 

This has been a pretty wild year for tech companies so far, but, for Workhorse especially, the general market-wide turbulence really sucked the wind out of its sails.

At its peak, the company stock gained around 1900% over the last 12 months, and even now that gain stands in excess of 560%.

The event that triggered Workhorse’s woes was the loss of the potential USPS contract due to be awarded in the postal service’s NGDV (Next Generation Delivery Vehicle) competition.

The contract would have been a perfect fit for Workhorse’s vehicles given the suitability of its C1000 electric delivery vans to the needs of USPS’ delivery commitments. However, the contract was given to rival Oshkosh instead, and the market reacted badly in Workhorse’s direction.

The story isn’t quite over yet as Ohio Congresswoman Marcy Kaptur is attempting to have the contract halted in order to investigate whether, among other things, the decision is in line with President Biden’s desire to have the federal fleet electrified. The outcome of this political wrangling, however, still remains to be seen.

There is some positive news for Workhorse to get excited about though. According to some sources, rumors are circulating that the FAA is about to approve the firm’s HorseFly delivery drone, which would open up a space for the company to utilize its custom-built UAV and compete – or perhaps partner with – the likes of Amazon (AMZN) and Mercedes-Benz in a fast-developing industry niche.

Workhorse is still a risky buy at the moment, even taking into consideration its discounted price. Q3 2020 vehicle delivery ambitions were thwarted because of supply disruption and COVID-19, with the company only getting seven units to market out of an estimated 300-400. This level of underperformance could be ruinous if it continues unabated.

However, if Workhorse does eventually win the prized USPS contract, and manufacturing is back to normal fairly soon, you could regret not buying in sooner.

Tesla Is Not Just An Auto Manufacturer

Tesla isn’t really just a vehicle manufacturer anymore. It is a highly diversified technology company, with interests in battery and solar power development, self-driving systems, motor engine design, vehicle servicing concerns – including its charging station network – and autopilot software production.

In fact, investors should brace themselves for less than stellar returns on the firm’s EV division if current headwinds are anything to go by. Global supply chain issues are hitting EV manufacturers hard of late, and Tesla’s famed 80% market share of the EV industry is simply unsustainable.

But this doesn’t mean that Tesla stock is any less attractive at current rates. The company has a proven track record of delivering value for investors, and there’s no indication that this is going to change anytime soon.

Analysts are predicting that Tesla’s Annual EPS will increase from $4.14 in December 2021 to $6.40 in December 2022. Revenue estimates are also bullish, with growth of 29% over the same period.

As with many other EV stocks right now, the time might just be right to buy the dip. And Tesla is no exception.

Blink Charging Infrastructure Critical To EVs

Blink Charging is in the business of building the infrastructure needed to support the budding EV revolution, and the success or failure of the project is as much on companies like Blink as it is on the vehicle manufacturers themselves.

Providing a network of easily accessible public charging stations is critical to the operation, and it’s not surprising that Blink is the recipient of public money from the likes of the Ohio Environmental Protection Agency and others to facilitate this aim.

And yet, making the enterprise profitable for EV infrastructure companies doesn’t seem to be so straightforward.

Take Blink’s most recent earnings report as an example. The company posted quarterly revenue growth of 250%, yearly revenue growth of 121%, but still recorded a net loss of $7.9 million – even worse than its net loss of $2.9 million the year before.

Blink doesn’t just rely on one kind of revenue stream either; it takes money from EV drivers every time they charge their cars, but it also sells hardware and receives income from maintaining network connectivity too.

So is there a bullish thesis to made for Blink given the current situation? Well, it depends on how the market punishes – or doesn’t punish – the company in the coming weeks. Its share price is already down roughly 40% this year, but unlike the “buy the dip” advice applicable to other tech companies who’ve suffered a dip, it may be more complicated with Blink.

The business has missed earnings expectations for three quarters in a row, and that’s worrying. It’s a hold for now; just wait and see. 

Fisker Has A Different, Popular Business Model

Fisker is an EV manufacturer expecting to launch its first product to market by 2022. Its owner, Henrik Fisker, first tried his hand at the EV game a decade ago, but was ultimately unable to prevail against the mighty Tesla. 

Undeterred, the renowned luxury car designer is reinventing a flexible lease model for a new generation of car owners more attuned to the subscription economy, and less concerned with outright ownership of their vehicle.

The company has already taken 14,000 pre-orders for the Fisker Ocean to date.

Fisker’s unique approach to development also means that its manufacturing process will not be capital intensive.

While Fisker will direct its efforts at design and branding, the building of the vehicles will be undertaken by third parties and partners.

This way production costs will be kept low, with the savings passed on to customers and reflected in a competitively priced product.

The firm hopes that this model will scale easily as orders increase, and they predict that by 2025 they will be selling 200,000 units per year.

As a company not expecting it first sale until Q4 2022, the stock does feel like it could be a risk getting into at this early stage. Conversely, if the brand gains traction between now and 2022, its share price could see some serious upside.

Fisker should be a classic high-risk, high-reward play; but it has underlying value, and a clever business model to back it up. It’s certainly worth a look at if for nothing more than an anti-Tesla hedge.

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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.