Chinese Electric Vehicle Stocks Surge Despite New Competition
The stock market hasn’t been kind to electric vehicle stocks in recent weeks. It is also fair to say that after a monstrous rally among Chinese EV stocks to their all-time highs, it is natural for these stocks to take a breather. While most attention will be on Tesla (TSLA Stock Report) as it will be part of the S&P 500 this Friday, another Chinese tech giant is mulling to build its own EV. Baidu’s (BIDU Stock Report) decision to join the red-hot industry at such an opportune time is gaining attention among investors. For investors who think Baidu is starting from scratch, think again. The company has been working on autonomous driving for several years and has partnerships with legendary automakers such as General Motors (GM Stock Report). As such, this is no newcomer to the auto industry.
What This Means For EV Stocks In The Stock Market Today
When you have both technology conglomerates and traditional automakers fighting to have a piece of the industry, you know it’s time to pay attention. Many analysts believe that some of the best growth stories over the next decade are in the EV space. Certainly, there are a lot of potentials for the top EV stocks. Besides EV brands, ‘pick-and-shovel’ plays of the EV industry have also been garnering a lot of interest. We saw how EV charging stocks climbed to record highs this year. In addition to that, autonomous vehicle stocks working on lidar technology have been in the limelight in recent weeks.
When investors are buying EV stocks left, right, and center, there is no fun observing from the sidelines. After all, the rise of EVs might be the biggest change the automotive industry will see in decades. Nevertheless, picking the winners from losers might be harder than it seems. That’s especially when there are so many emerging players coming into the space. But, what other EV stocks should you consider apart from the clear favorite, Tesla? That depends on what you’re looking for. There has now been an increasing variety of EV stocks out there to fit your preference. Yet, with a fair amount of hype in the market, it is not surprising that the euphoria may have become a bigger driver than actual fundamentals. With all that in mind, are these 3 EV stocks the best stocks to buy right now?
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Best Electric Vehicle Stocks To Buy [Or Avoid] Right Now: Nio
Chinese EV maker Nio (NIO Stock Report) is the best EV stock to watch in the stock market this year, instead of Tesla. NIO stock was moving higher on Tuesday after a successful secondary offering, which was heavily oversubscribed. In addition, the bullish targets from Wall Street analysts were also the reasons for the gains recorded on Tuesday.
The red-hot EV maker’s third-quarter results were sensational. Sales increased by 146% year-over-year. Its loss of 12 cents per share and sales of $667 million beat Wall Street’s estimates of a loss of 19 cents per share and $663 million in sales. The company continues to grow at an explosive rate in the most promising EV market in the world. It also reported strong fourth-quarter guidance. The company estimates that it will deliver between 16,500 and 17,000 electric vehicles in the fourth quarter. Earlier this month, the company also announced a new monthly high in terms of deliveries for November. Therefore, you could say that all of these favorable trends will persist in this current quarter.
At a price-to-sales (P/S) ratio of over 26 times, Nio certainly looks more expensive than Tesla, which has a P/S ratio below 23 times. Admittedly, Nio is still much smaller than Tesla and could have a longer growth runway. In addition, with its leadership position among U.S.-listed Chinese EV companies, there is no shortage of investors looking to get a piece of the company. All things considered, do you have NIO stock on your watchlist?
Best Electric Vehicle Stocks To Buy [Or Avoid] Right Now : Xpeng
Another EV stock to be on the lookout for is Xpeng (XPEV Stock Report). The company is one of China’s leading smart EV companies. Xpeng develops and manufactures smart EVs that are seamlessly integrated with advanced AI and autonomous driving technology. The company recently raised $2.45 billion, taking advantage of the strong interests among investors. That was an astute move on the part of the company, considering that the stock has more than tripled since its IPO earlier this year. The additional funds will be able to bolster Xpeng’s balance sheet and support future initiatives.
From its most recent quarter, the company had exceeded analyst expectations. The company delivered 8,578 vehicles in the quarter, representing an increase of 265.8% year-over-year. Its long-range smart sedan, P7 boasts an impressive driving range of 706km and features the XPILOT 3.0 autonomous driving system. Deliveries of its P7 model had reached 6,210 units, compared with 325 units in the second quarter of 2020.
Xpeng core business relies on its innovation through its in-house R&D and data-driven capabilities. The company CEO, He Xiaopeng, states that this will keep Xpeng at the forefront of the smart EV industry and also positions the company for future growth. The company has expansion plans for a new factory and overseas business. This would reflect a strong market appeal for Xpeng’s products and will no doubt pay off for the company’s success in the long run. With that in mind, will you consider XPEV stock after its recent dip from its all-time high?
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Best Electric Vehicle Stocks To Buy [Or Avoid] Right Now: Workhorse Group
You may have heard of the electric utility vehicle company Workhorse Group (WKHS Stock Report). Year to date, WKHS stocks are up a jaw-dropping 611%, making it easily one of the best performing EV stocks in the stock market today. The company is a bidder in a U.S. Postal Service contract for 180,000 delivery vehicles worth $6.3 billion.
While the stock has taken a bit of a breather after delays in the award of the contract, Oppenheimer analyst Colin Rusch remains bullish, saying, “We don’t believe a delay in this announcement changes the dynamics for WKHS in potentially winning a portion of the business … As the only US-based full EV supplier remaining in the bid, we believe the company remains well-positioned to win a sizable portion of the contract. At the same time, we believe activity among buyers of last-mile delivery vehicles is accelerating and that WKHS could see additional customer wins before year-end.”
In addition, Workhorse has a 10% stake in electric pickup truck company Lordstown Motors. According to news reports in November, Lordstown had received about 50,000 orders for its all-electric pickup truck. Now, Lordstown Motors is merging with the SPAC DiamondPeak (DPHC Stock Report). Investors couldn’t contain their excitement as Workhorse’s shares in Lordstown could now be worth considerably more. The question is, can WKHS stock continue its momentum going forward?
