EV stocks have multiplied in Tesla‘s (TSLA) wake and as electric cars look to go mainstream — but not all are created equal. Some car stocks are more ready than others for an EV future. Here are the top-rated electric vehicle makers.
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Are Electric Vehicle Stocks A Good Buy?
Companies with strong track records of earnings growth and market outperformance that are forming bullish chart patterns are the best candidates for stocks to buy and watch, according to CAN SLIM guidelines.
But most of the new EV stocks have neither. They include Fisker (FSR), Canoo (GOEV) and Lordstown (RIDE). Others, like Rivian, aren’t public yet, while Lucid, Faraday Future, and Xos Trucks will debut after their blank-check deals close.
Meanwhile, Chinese EV stocks like Nio (NIO), Xpeng (XPEV) and Li Auto (LI) sell tens of thousands of vehicles, but are unprofitable for now. Then there are legacy auto giants like General Motors (GM) and Ford (F) that are transforming into electric-vehicle powerhouses.
Electric Car Stocks Include Battery Stocks, Charging Stocks, EV Suppliers
The growing universe of EV stocks doesn’t end with carmakers. Other companies make car batteries and car charging stations. Among them are EV charging networks ChargePoint (CHPT) and Blink Charging (BLNK). Rivals EVgo and Wallbox will soon go public via blank-check mergers.
Hyliion (HYLN) is developing electric powertrains for big-rig trucks as well as powertrains that can be compatible with renewable natural gas and hydrogen fuel cells.
Romeo Power (RMO) makes battery packs for commercial EV fleets. And QuantumScape (QS) touts a major breakthrough in solid-state lithium metal batteries.
Magna (MGA) provided components for the Chevy Bolt EV and will make battery enclosures for GM’s Hummer electric truck, due in late 2021. It already makes e-drive gearboxes for Nio and Xpeng.
Best EV Stocks To Buy Or Watch
The recent market sell-off has left the charts of EV stocks severely damaged with few in a buy zone. But these stocks had the best ratings, as of July 20. Most are not pure-play EV stocks but are pivoting aggressively to electrification.
- Tesla stock has a Composite Rating of 81 and an EPS rating of 74. It’s on the prestigious IBD Leaderboard list of stocks with the most potential for big gains. The top auto and EV stock by market cap predicts 50% average annual growth in vehicle deliveries, with 2021 expected to be faster than that pace. In 2020, deliveries grew 36% to 499,647. It’s highly anticipated Cybertruck could arrive later this year. The new Model S Plaid is Telsa’s fastest car yet, going from zero to 60 miles per hour in less than two seconds.
- GM stock has an IBD Composite Rating of 61 and an EPS rating of 74. General Motors on June 16 again hiked its spending on electric and autonomous vehicles to $35 billion through 2025, up from a prior target of $27 billion, and aims to launch 30 new EVs around the world by then. GM’s highly anticipated Hummer electric truck is supposed to arrive in late 2021. A luxury Cadillac electric SUV follows by mid-2022, and a Hummer electric SUV by early 2023.
- Ford stock has a Composite Rating of 77 and an EPS rating of 71. In late May, Ford hiked spending on electric vehicles to more than $30 billion by 2025, and expects 40% of its global sales to be fully electric by 2030. Its goal is to launch 16 fully electric cars by 2022. On June 17, Ford reported 100,000 reservations for its F-150 Lightning electric truck, within a month of launch. That Cybertruck rival is due in mid-2022.
- Volkswagen stock has no Composite Rating but an EPS rating of 96. VW has a five-year spending plan of $86 billion, with plans for 70 fully electric vehicles by 2030. The German auto giant sold 231,600 fully electric cars last year and plans to more than double that to 500,000 this year. The overall sales target for electrified vehicles, including plug-in hybrid models, is 1 million this year. Volkswagen’s new ID.4 electric SUV, key to those goals, is now selling globally.
- Ferrari stock has a Composite Rating of 62 and an EPS rating of 82. The sports-car icon will launch its first all-electric supercar in 2025, joining the ranks of EV stocks after rejecting the shift to electric vehicles for decades. Instead, Ferrari focused on hybrid supercars in the interim and recently launched its first hybrid EV, the SF Stradale.
- Magna stock has a Composite Rating of 65 and an EPS rating of 73. In addition to supplying EV parts, the company will make Fisker’s Ocean electric SUV, starting in November 2022, and could end up building a possible Apple Car. In fact, Magna already produces entire vehicles for BMW, Daimler and Jaguar. Magna and South Korea’s LG Electronics have a joint venture to make e-motors, inverters, onboard chargers and e-drive systems for electric vehicles.
In the near term, EV stocks will continue feeling the squeeze from the global chip shortage that is affecting the overall auto industry. But longer term, more government support is likely headed for electric vehicles, while prices are coming down.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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