Many Investors Continue To Favor EV Stocks, Should You Buy On The Dip?
Electric vehicle (EV) stocks have drawn huge interest from investors over the last year. However, the recent declines among top electric vehicle stocks have investors scratching their heads for answers. It’s not just Tesla (NASDAQ: TSLA) that saw its stock struggling. Most top EV stocks have taken a downturn as of late due to rising interest rates. But it’s also important to note that fundamentally, nothing has changed in the industry.
If you are a regular reader of StockMarket.com, you would know that we are big fans of EVs and EV stocks. And why is that so? Perhaps you have forgotten what your fourth-grade science class has taught you. Oil, among many of its cousin fossil fuel types, is finite. Oil reserves may only last us a few decades before we have to resort to alternative energy. This may spell doom for a big chunk of the automotive industry. That said, it also created great opportunities for electric vehicle manufacturers to grow and prosper.
Vehicle giant GM (NYSE: GM) announced that they intend to put the production of petroleum-based vehicles to a grinding halt by 2035 and move forward to the bright future of electric-based technologies. Moreover, Joe Biden’s recent announcement also created a shifting change to renovate their federal fleet system into adopting electrical alternatives. Given all this buzz around, it is no surprise that players are placing their chips on EV companies. With that said, could these top EV stocks to watch present an excellent opportunity to buy at bargains?
Best EV Stocks To Buy [Or Sell] Right Now
- Fisker Inc. (NYSE: FSR)
- Nio Inc. (NYSE: NIO)
- Ford Motor Company (NYSE: F)
- Baidu Inc. (NASDAQ: BIDU)
Fisker Inc. (FSR)
Fisker is looking like a force to be reckoned with in the EV industry. With an all-electric sedan dubbed the EMotion and their electric SUV counterpart called the Ocean being in development, they also managed to join Taiwan-based Foxconn in a partnership to produce their electric vehicle in the fourth quarter of 2023.
According to their statement, the Taiwanese company is set to produce at least 250,000 vehicles annually for Fisker. That is almost double what Tesla narrowly achieved in Q4 2020. This creates a hype boom in Fisker’s shares. The stock skyrocketed as high as $31.96 earlier this week. Unfortunately, it is not immune to the broader market downturn, falling nearly 30% since then.
Now, Fisker has yet to make a single dime in its business. But investors are looking forward to bringing it closer to its goal of becoming a viable automaker in the near future, worthy enough to challenge Tesla for the throne in the EV market. With that in mind, would you consider adding FSR stock to your portfolio?
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Nio (NIO)
China-based EV company NIO had to lick its wounds when their shares continued to slide after posting its fourth quarter results. This came as the February deliveries fell 23% following months of subsequent gains. For those unfamiliar, the dip in sales is due to the Chinese Lunar New Year holidays in the month.
This is the time when many take a break from work and spend time with their friends and family. That holiday is now over and investors could expect a ‘rebound’ in the March deliveries. But don’t expect hypergrowth, at least in the first two quarters. Why? Because the global shortages of semiconductors are affecting NIO too.
Looking on the bright side, these are temporary headwinds. Investors might want to take this opportunity to grab NIO stock at bargains shall it continue to dip further. Analysts at Wedbush believe that China’s EV growth could blow past expectations through this year and next. A significant amount of political support has continued in China for continued green investments in sectors like EVs. After all, NIO is China’s poster child in the EV industry. Considering all these, would you be adding NIO stock to your watchlist?
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Ford (F)
After a few decades of being an ordinary automaker, F stock appears to be revving back up. While it is still a far cry from its high of around $100 per share twenty years back, it has built up some momentum amid a bright outlook with its new all-electric vehicle, the Mustang Mach-E. And guess what, the Mustang Mach-E is eating into Tesla’s US sales. That could possibly explain why F stock could hold relatively stable while other red-hot EV stocks are tumbling by double-digit percentages in recent trading sessions.
“Mach-E accounted for nearly 100% of the [Tesla] share loss,” said Adam Jonas, Morgan Stanley’s auto analyst, in a note earlier this week.
It’s only a matter of time emerging EV players like Ford could grab significant market shares as it expands to other markets. No doubt, there is a lot of room for Ford to expand into. After all, the trillion-dollar auto market can accommodate multiple big players. You are looking at an established automaker with high exposure to both EV and AV technology. The question is, do you believe Ford has the potential to become a force to be reckoned with? If so, would you be willing to bet that F stock will see brighter days ahead?
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Baidu (BIDU)
Some of you may be familiar with Baidu as the Chinese search engine. But the company has been evolving over the years. A new challenger in the EV industry, Baidu has appointed a brand-new chief executive officer. It has also decided on its brand in its electric vehicle venture.
Collaborating with Zhejiang Geely Holding Group, Baidu’s CEO Robin Li commented during quarterly earnings calls that they are looking to utilize the company’s smart driving capabilities with Geely’s vehicle manufacturing expertise to make intelligent electric vehicles.
Li also mentioned that it will take 3 years from conceptualization to launch of their EV models, becoming a benchmark product and convincing other automotive companies to adopt Baidu’s autonomous driving tech. If you are looking to invest in EV stocks, BIDU stock is your clean slate.
