The electric vehicle (EV) market happens to be one of the fastest-growing consumer focused segments in the transportation sector. Driving the increasing adoption of EVs are supportive government policies, technological advances and changes to consumer preferences. As consumers continue to choose EVs over normal combustion engine cars, the companies behind these vehicles and their shareholders will profit immensely. Below we will be exploring three top-rated EV stocks that Wall Street analysts are loving these days.
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BYD (OTCMKTS:BYDDY) earned numerous spots on my ‘buy’ lists in 2023 — and 2024 may be no different. The EV maker has garnered a number of achievements recently. In tandem with having an undisputed market position in China, the EV maker has also become the world’s top EV maker in 2023. The Chinese EV maker was able to trounce its American rival, Tesla (NASDAQ:TSLA) in terms of electric vehicle sales. In Q4 2023, BYD sold 526,409 electric vehicles, while Tesla sold 484,507.
BYD has also diversified its business into not only manufacturing electric vehicles but also supplying the batteries that power them. The automaker became a key player in the battery market, ousting LG Energy Solutions as the world’s number 2 EV battery supplier. These glowing characteristics make it easy to understand why Wall Street has rated BYD shares a “strong buy”. While BYD is less known in the U.S., it has a dominant presence in China and is growing its sales in overseas Asian markets. Investors who decide to bet on BYD now could stand to benefit from the strong, secular tailwinds in the broader EV industry.
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Tesla (NASDAQ:TSLA) is another one of the top-rated EV stocks in the global electric vehicle market. The automaker has been also playing an influential role in creating the basic infrastructure for electric vehicle charging, ultimately tackling the EV market from different angles.
Throughout 2023, Tesla defied skeptics broke records. In particular, Tesla’s quarterly earnings have come in above analysts’ estimates, and the price-cut strategy the automaker began to pursue in the beginning year has increased quarterly deliveries while also placing pressure on gross margins. Delivery numbers for Q4 2023 were released a week ago and continued to be solid. The automaker delivered 484,507 vehicles during the last three months of last year, beating Wall Street estimates.
Despite growing competition from China’s BYD and fears that EV demand in Tesla’s geographic end-markets may be waning, Tesla will likely remain not just relevant but also a key player in the space. The company has garnered a “buy” rating from a number of Wall Street analysts thus far.
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Rivian (NASDAQ:RIVN) is another stock Wall Street analysts are loving these days. According to Koyfin, the EV maker has a “strong buy” rating. Rivian generated more than $3.7 billion in revenue over the last twelve months, based on robust delivery.
However, despite a nice rating from Wall Street analysts, investors should consider proceeding with caution here.
While Rivian is producing and delivering vehicles, the amount sold is still not enough to warrant the company’s $17 billion market capitalization. Not to mention, Rivian has yet to reach bottom line profitability. In 2022, the automaker lost $6.7 billion, significantly depleting its cash balance $18.1 billion in 2021 to $11.6 billion at the end of 2022.
Deliveries are certainly picking up for Rivian and 2024 may be a good year for stock, but investors should be cautionary.
On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems. His areas of expertise are semiconductor and enterprise software equities. He has work experience in both investing (public and private markets) and investment banking.
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