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7 Cheap Electric Vehicle Stocks to Buy Before They Boom
These cheap electric vehicle (EV) stocks are wildly oversold. However, that may not be the case for much longer.
Remember, global leaders are demanding…
These cheap electric vehicle (EV) stocks are wildly oversold. However, that may not be the case for much longer.
Remember, global leaders are demanding millions of EVs on the roads in an effort to reduce emissions. President Joe Biden, for example, wants 50% of all new U.S. car sales to be electric by 2030. In fact, according to the White House in August 2021:
President Biden is committed to changing that and delivering for the American people. That is why he will sign an Executive Order that sets a new target of electric vehicles representing half of new vehicles sold in 2030. This builds on the announcements today from automakers, representing nearly the entire U.S. auto market who have positioned around the goal of reaching 40 to 50 percent electric vehicle sales share in 2030.
Even better, electric vehicle demand appears to be through the roof. According to the International Energy Agency (EIA), as noted by CNBC: “Electric vehicle sales are on course to hit an all-time high this year.” In fact, the EIA added that 2022 was “expected to see another all-time high for electric vehicle sales, lifting them to 13% of total light duty vehicle sales globally.”
That being said, investors may want to consider a basket of EV stocks accelerating on the news.
Cheap Electric Vehicle Stocks: Tesla (TSLA)
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You can’t have a list of EV stocks, and not include Tesla (NASDAQ:TSLA).
After plunging from about $310 to $210, TSLA is one of the top cheap electric vehicle stocks to consider. For one, it’s starting to pivot from support dating back to late May.
From a current price of $220, I’d like to see the TSLA stock initially refill its bearish gap around $265, and eventually make its way back to $310. In fact, I would take full advantage of the stock at current prices. After all, you can’t have an EV boom without TSLA.
Earnings continue to be strong here, too. While we don’t have third-quarter numbers in our hands just yet, we can look back at the second quarter’s data. Adjusted earnings per share (EPS) came in at $2.27, as compared to expectations for $1.81. However, revenue did slip from an expected $17.1 billion to $16.93 billion. But we can blame that on inflation and cost pressures, which could weigh on Q3, as well. If it does, I believe the pain will only be temporary.
Ford Motor (F)
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Ford Motor (NYSE:F) just said it tripled year-over-year electric vehicle sales. All thanks to Mustang Mach-E’s growth. The company also gained a 3.1% EV market share, according to Electrek.
According to Electrek contributor Peter Johnson:
The US automaker continues to see rising demand for its electric vehicles. Despite ongoing supply issues, Ford’s electric vehicle sales tripled (+197.3%) from last year, gaining 3.1% market share as the automaker looks to hit its goal of a 600,000-run rate by the end of 2023.
We also have to consider that EVs will be a big part of Ford Motor’s future. At the moment, it’s working on its Blue Oval EV manufacturing hub in Tennessee. It’s also planning to build a new facility in Kentucky, which will also include EV vehicles and battery assembly.
Cheap Electric Vehicle Stocks: Global X Autonomous & Electric Vehicles ETF (DRIV)
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One of the best ways to diversify among EV stocks at less cost is with an exchange-traded fund, or ETF, such as the Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV).
With an expense ratio of 0.68%, this ETF invests in “companies involved in the development of autonomous vehicle technology, electric vehicles, and EV components and materials. This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt,” as noted by Global X.
With this ETF, investors have exposure to EV and autonomous stocks, such as Tesla, Nio, Qualcomm (NASDAQ:QCOM) and Nvidia (NASDAQ:NVDA), for example.
iShares Self-Driving EV and Tech ETF (IDRV)
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Another ETF, the iShares Self-Driving EV and Tech ETF (NYSEARCA:IDRV), has an expense ratio of 0.47% and invests in growth and innovation in and around EVs.
According to iShares, this ETF offers access to companies at the forefront of self-driving and electric vehicle (EV) innovation as well as the battery technology space. It also offers exposure to global stocks within the full value chain of self-driving and EV industries. Some of its top holdings include Tesla, Qualcomm (NASDAQ:QCOM), Apple (NASDAQ:AAPL), Toyota Motor (NYSE:TM), and Intel (NASDAQ:INTC).
Cheap Electric Vehicle Stocks: Nio (NIO)
Source: Robert Way / Shutterstock.com
Another one of the top cheap electric vehicle stocks to consider is Nio (NYSE:NIO).
Over the last few weeks, the EV stock plummeted from about $24 to a recent low of $12.78. That puts it at triple bottom support dating back to late March. It’s also oversold on RSI, MACD, and Williams’ %R, and overdue for a bounce. Additionally, Deutsche Bank analyst Edison Yu is still a fan of the stock with the company’s ET5 midsize sedan. It also includes the fact NIO’s older models are still selling well.
Better, most of the company’s latest earnings report was positive, added Yu. As noted by TheFly, NIO reported: “mostly solid” Q2 results, especially on gross margin, while providing a “better than feared” Q3 volume outlook. It’s why he has a buy rating and a $39 target. Even more exciting, Nio just announced the deals of its expansion into the German, Dutch, Danish, and Swedish markets. “Our commitment to the region marks the start of NIO’s next chapter in our global development,” said CEO William Li, as noted in a release.
Li Auto (LI)
Source: Robert Way / Shutterstock.com
Investors may also want to consider Li Auto (NASDAQ:LI). While LI has been badly beaten down after lowering its forecast for this quarter, don’t write it off just yet. The problem is that the company said it has plans to deliver about 25,500 vehicles in Q3 2022, which is still light.
However, we have to consider the shortfall is typical for the industry at the moment, with inflation and issues getting parts. While the company is having headaches with supply chain issues, there’s still plenty of demand. With LI, we have another obscenely oversold, long-term opportunity.
Cheap Electric Vehicle Stocks: Xpeng (XPEV)
Source: Andy Feng / Shutterstock.com
Xpeng (NYSE:XPEV) has also been beaten up pretty badly. But we’re not writing this stock off either. The stock has become so cheap that founder and CEO Xiaopeng bought 2.2 million ADRs.
According to Barron’s Al Root:
XPeng stock is down more even though the company has done well in terms of deliveries. Through August, XPeng had delivered about 90,000 vehicles so far this year, up about 96% from the same period in 2021. NIO has delivered about 72,000, up about 28%, while Li has handed customers about 75,000, for an increase of 57%.
Helping XPEV stock is Deutsche Bank analyst Edison Yu, who also has a “catalyst Buy call” on XPEV ADRs. A “catalyst call” is typically used to indicate a sense of urgency. The analyst is bullish on the company’s new G9 SUV and has a $33 price target.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
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