Top 3 EV Stocks to Buy Now and How to Invest

Posted on January 18, 2021 |

Note: Post may contain affiliate links.

Electric vehicle sales were up six-fold in the five years through 2019 and still represent just 2% of the light vehicle market! One look at shares of Tesla and Nio and you might think the EV stocks trend is overpriced, but in reality…it could just be getting started!

In this video, I’ll show you why electric vehicle stocks could have further to run, how to find the best companies and then reveal three EV stocks to buy right now.

Nation, EV stocks and the potential in the electric vehicle market has been a huge theme for years but it’s surprising how much growth this market still has to run. Even on that six-fold increase in EV sales, from just 200,000 cars in 2014 to 1.2 million in 2019…it’s just 2% of the U.S. market.

Sales in Europe and China are growing even faster and a lot of companies have committed to all electric models within the next 20 years.

The cost of the lithium battery technology and the cars themselves have come down to where Main Street consumers can buy them and that’s when you start seeing exponential growth in sales.

How to Find the Best EV Stocks to Buy?

So in this video, I want to show you how to find the best EV stocks to buy, how to start your list and find maybe some of the undiscovered electric vehicle companies you don’t hear as much about.

We’ll start here using the discover feature on Stockcard.io and I like to start here because we can start searching for a theme and the search bar will drop down with stock collections of companies in that theme. So here we see two collections, electric vehicles and one for EV manufacturing.

That gives us 95 companies in the theme that we can research further and each one is broken down into these four fundamental areas; growth, operations, return and valuation.

The research also shows you important dates, industry and market growth potential and compares the past investment return with other companies in the sector.

Sign up on Stockcard for free and make stock-picking easy with the research tool I use! Use promo code: bowtienation for an exclusive discount!

So from that stockcard collection, we have 95 companies in the EV stock list that we can research to find the ones with the most potential. And what I want to do with this video is show you that investing in EV doesn’t just mean stocking up on shares of Tesla or Nio. Besides the car makers, there are other ways to invest in the theme like the battery suppliers, parts and the commercial vehicle segment. Even some of the legacy car makers could be good investments. Ford and Chevy both have two of the top ten EV models by total sales now.

And I think that diversification in segment is important in your analysis. Shares of the popular car makers have been bid up to amazing valuations. Even after growing earnings by 131%, shares of Tesla are still priced over 1,500-times annual profits.

Not only will the stocks we talk about give you a broader exposure to the technology but you’ll be able to pick up some undiscovered players trading relatively cheaply.

3 EV Stocks to Buy

Before I reveal those three EV stocks to buy, you might also want to watch the iShares Self-Driving EV and Tech ETF, ticker IDRV. The fund holds shares of 100 companies in the self-driving and electric vehicle theme and has produced a return of 58% over the past year!

And why I really like the fund, besides getting exposure to both those trends, self-driving and electric vehicles, is it includes a lot of stocks I can’t buy in the U.S. markets like LG Chem and Alps Alpine.

The fund is a great way to get that broad investment in the theme along with these individual stocks and is actually trading for just 24-times on a price-to-earnings ratio of companies in the portfolio, so not that expensive.

Kandi Technologies Group

Our first EV stock though is Kandi Technologies Group, ticker KNDI, and I like this one for its product diversification.

Not only does Kandi produce three models of electric vehicles sold in China and the U.S. but it also has a battery swap system, is a parts supplier to multiple OEMs and produces all-terrain vehicles.

That model brings in revenue from multiple sources, allows it to leverage its technology not only in its own cars but other segments…and frankly some that aren’t as saturated as the car market.

The company launched its EV cars in the U.S. last year, one with a price tag of under $10,000 after tax credits and got over 700 pre-sale deposits on the launch.

This is definitely an undiscovered player in electric vehicle stocks and trades for just four-times on a price-to-sales basis…that’s a seventh the 30-times multiple you pay for shares of Tesla or NIO!

Next I want to include a stock with exposure in the lithium segment of the industry. The lithium-ion batteries are really where the bottleneck is happening in electric vehicles with production not able to keep up with demand so I definitely want something here.

Now it’s been just over a year since I recommended specialty-chemical company Albemarle, ticker ALB, on it’s lithium business and the shares are up 149% since, but here I want something a little further along in the supply chain, a company developing the battery technology itself.

QuantumScape

The biggest news in batteries came last year when QuantumScape, ticker QS, went public through a SPAC acquisition.

The startup was originally backed by Bill Gates and now counts Volkswagen as its largest shareholder with a $300 million investment. The European car company has plans to launch 70 EV models and produce 22 million EV cars by 2029 and is betting heavily on QuantumScape.

The company has demonstrated a solid-state battery technology that enables 300+ miles of charge and can recharge in less than 15 minutes. That compares to hours of recharging and most electric vehicle batteries stuck around the 200-mile capacity.

Now the company has only demonstrated this on a smaller battery and still needs to prove it on larger car-size batteries. Revenue isn’t expected until 2025 but this is next generation tech that could transform the industry. Sales are expected to start around $39 million in 2025 and rise nearly ten-fold to $275 million by 2026.

Workhorse Group

Workhorse Group, ticker WKHS, isn’t quite as undiscovered or cheap as the other two in the list but could still be one of your best investments in EV stocks.

The global commercial vehicle market is a $1.3 trillion opportunity with annual growth of 7% but development of electric vehicles here has been slower than the passenger segment because of challenges to battery power and time to recharge.

That means there’s less competition for this technology and Workhorse is the market leader in the medium-duty and cargo van market.

The company is already partnering and selling to FedEx, Amazon and Walmart and has an $18 billion addressable market just in that last-mile delivery market for the U.S.

Workhorse designed the C-Series with UPS and booked a 1,000+ order for the trucks. These things have a 100-mile fully electrical range on less than six hours charging time. The company is developing the US Postal Service’s next-gen vehicle for a potential 165,000 vehicle deal and $6.3 billion in sales. And even beyond that last-mile market the company is serving now, I think this technology transfers into the larger diesel and commercial market in the future for an even bigger market opportunity.