Could These EV Stocks Be Better Buys Than Tesla Right Now?
As nations slowly phase out oil and gas in favor of renewable energy, the action among electrical vehicle (EV) stocks have been epic. And it’s no secret that these EV companies are set to replace their traditional fossil fuel counterparts. With a huge market there for the taking, automotive companies are pushing R&D to come up with such alternatives. Moreover, green initiatives and climate awareness have driven investors to look for the best EV stocks to buy in the stock market today.
The success of Tesla (NASDAQ: TSLA) in the EV market not only proves that it is a profitable vertical. But it has also driven the creation of new startups, especially outside the US. Not only do these startups diminish Tesla’s dominance in the market, but they also sparked fierce competition in the industry. As a result, investors are spoilt for choice in determining which EV stocks to buy.
Is Volkswagen’s Commitment To Electrification Sending EV Stocks Higher?
Volkswagen (OTCMKTS: VLKAF) highlighted its commitment to electrification during its Battery Day event on Monday. That sent a clear message to the market – EV is the future. Following this, Volkswagen is joining the likes of General Motors (NYSE: GM) and Ford as some of the traditional automakers making aggressive moves to electrification. Gone were the days when Tesla was the only pure EV play when you want to invest in this space. Many of the EV stocks in the stock market today have the potential to be game-changers for investors hoping for triple-digit percentage gains over this decade. With all these in mind, would you consider adding these EV stocks to your watchlist today?
Top 4 EV Stock For Your Watchlist This Week
- Xpeng Motors Inc. (NYSE: XPEV)
- Nio Inc. (NYSE: NIO)
- Fisker Inc. (NYSE: FSR)
- Ford Motor Company (NYSE: F)
Xpeng Inc. (XPEV)
Chinese EV automaker Xpeng Inc. has set a new milestone in China’s market with a total of 50,000 vehicles delivered to the masses to date. Such confidence in sales also boosted investment interest. But the real reason to cheer on XPEV is that the company announced a strategic agreement with Guangdong provincial government for a $78 million funding on Monday. According to a press statement, “The funding will further accelerate both business expansion and the company’s transition in the province.“
Such news has definitely boosted investors’ confidence. XPEV stock has risen by about 30% since the start of last week. Nevertheless, it is still well below its peak in November 2020. With brokerage firms such as Daiwa Securities rating XPEV stock as a “Buy”, this should entice investors to continue to invest in Xpeng.
Xpeng also has multiple ongoing projects, which include releasing a third EV model in the second half of 2021. The company is also set to update its XPILOT smart vehicle system to 2.0 which includes memory parking and vehicle safety. With such rapid improvement and sales figures, is it enough to put XPEV stock on your watchlist?
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Nio Inc. (NIO)
Next up, Nio requires no further introduction as one of the largest Chinese EV companies capable of going toe to toe against Tesla. With 43,728 EVs delivered in 2020 alone, Nio is already setting an impressive delivery of 7,225 vehicles in January and 5,578 vehicles in February. Should Nio maintain that momentum, the company would be on track to break its 2020 delivery numbers by the end of Q2 2021.
Recently, the EV manufacturer launched its second-generation Power Swap Station at NIO Day. Such modular design allows the battery to be swapped out and upgraded with a better service capacity compared to its predecessor. Nio Chairman William Bin Li also introduced a 150-kilowatt hour battery pack which significantly extends the driving range of its vehicles.
Like many other growth stocks, NIO stock has been under pressure over the past month. The stock fell over 20% during that period. Considering the long-term potential of the company, could this be an opportunity to buy the stock at a cheaper price? After all, NIO stock continues to attract the attention of investors including the Ontario Pension Plan. Are you ready to straddle on NIO stock before it rebounds or wait it out?
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Fisker Inc. (FSR)
While most EV stocks took a dive in the past few weeks over inflation fears, Fisker bucked the trend and nearly doubled its stock price last month. Not only is Fisker looking to be a solid company with its asset-light model, but it is also making smart strategic partnerships. With even the U.S. government looking to transition its fleet towards greener alternatives, Fisker could continue riding this trend.
More importantly, it has also been in the news regarding its latest EV development collaboration announced back on February 24. This is because Fisker is partnering with Apple’s (NASDAQ: AAPL) assembly partner Foxconn. Annual projected volumes are expected to be over 250,000 units for the new models. Combined with the Manga Styer’s manufacturing capacity, Fisker could have a 500,000-unit production capacity by the end of 2025.
FSR is also set to improve on their battery lines. It is exploring agreement opportunities with different battery-maker companies with the intention of setting up a reliable manufacturing facility to reduce production risks. With FSR stock dropping by around 20% from its peak a few weeks ago, do you think it is attractive enough for your portfolio?
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Ford Motor Company (F)
Ford may be the only legacy carmaker on this list, but it is definitely not a laggard. Its recent recalls of 2.6 million vehicles to replace faulty Takata airbags may have weighed on sentiments. But F stock has risen by over 50% this year alone. And that could be to do with Ford EV ambitions. Earlier this year, it announced its plan to double the investment into EV R&D by $22 billion through 2025.
CEO Jim Farley highlighted that although the majority of its vehicles will be all-electric, it will still introduce hybrid models with combustion engines. Ford will also introduce autonomous driving in their vehicle lines. Customers are definitely receptive to Ford’s direction. In fact, the electric version of Mustang-E sold 3,739 units in February.
With new initiatives beginning to bear fruit, Ford could be looking at brighter days ahead. CFO John Lawler said that Ford will generate about $3.5-4.5 billion in adjusted free cash flow in 2021, up from $0.7 billion in 2020. Considering all these, will F stock return to its former glory?
