EV’s stock has multiplied TeslaIts (TSLA) waking up and electric cars seem to go mainstream – but not all are created equal. Some car stock EVs are more ready for the future than others. Here are the top-rated electric-vehicle makers and EV dramas.
- Lee Auto
- Global X Lithium and Battery Tech ETF
A good purchase of electric-vehicle stock?
Companies with two important characteristics usually make the best candidates to buy and view stocks according to the CAN SLIM guidelines. First, they need a strong track record to grow their earnings. Second, the stock needs to reflect the elements of market outperformance and shape the bullish chart pattern.
But most new EVs don’t have stock. Including them Fisker (FSR), Canoe (GOEV), Faraday’s future (FFIE), Lordstown (Ride) and Xos (XOS). In fact, many of these EV startups are not yet building or supplying electric vehicles.
Be wary of stocks near buy points with IBD leaderboards
However, the two startups have started selling their first electric cars, bringing in revenue. Lucid Motors (LCID) launched Lucid Air, a luxury electric sedan, last October. Revian Automotive (RIVN) R1T began delivering an electric pickup in late 2021, along with the rest of the R1S SUV this year.
Meanwhile, Chinese EVI preferred stock Neo (NIO), Expang (XPEV) and Lee Auto (LI) sells thousands of cars, but remains unprofitable for the time being. Then there are the legacy auto giants Ordinary motor (GM), Ford (F) and Chinese World Co. (BYDDF) which is being converted into an electric-vehicle powerhouse.
Ferrari (RACE) plans to launch its first all-electric supercar in 2025, joining the EV stock list after a long hiatus from electric vehicle transfers.
Electric vehicle stock includes battery stock, charging stock, EV supplier
The growing universe of EV stocks does not end with car manufacturers. A constellation of other companies supplies car batteries, car charging stations, electric motors and other EV-related products. This includes EV charging network Chargepoint (CHPT), Evigo (EVGO), Blink charging (BLNK) and Wallbox (WBX).
Hyalion (HYLN) is developing electric trains as well as power trains for large-rig trucks that can be compatible with renewable natural gas and hydrogen fuel cells.
Romeo Power (RMO) manufactures battery packs for commercial EV fleets. QuantumScape (QS) Solid-state lithium metal proves a major breakthrough in batteries. And Global X Lithium and Battery Technology ETF (LIT) keeps a basket of stock, from lithium miners to battery manufacturers, ready to benefit from the rise of electric vehicles.
Free (MGA) provides battery enclosures and e-drive gearboxes to the liking of GM, Nio and Xpeng. The company will build the Fischer Ocean SUV, which could arrive later this year.
The best EV stock to buy or view
Most EV stock charts are under new pressure after the fatal losses last year. Broadly speaking, both established automakers and startups see themselves as a speculative bet on electric vehicles, a new field. They have suffered as a result of a risk-off attitude prevailing in the current market and a shortage of key components.
As of May 18, the following electric-car stocks had the best mix of basics and technology.
Tesla: EV sales are on the rise
Tesla Stock, the top auto and EV stock by market capitalization, has an IBD composite rating of 83 and an EPS rating of 78. Shares are below the 10-week moving average and below 2022 in the Cowid Challenge in China. The relative strength line of the TSLA stock is in the 2022 low but shows a big, long-term uptrend.
Tesla expects annual car deliveries to increase by 50%, although the recent Shanghai Coveid shutdown has affected sales. In 2021, Tesla increased deliveries by 87% to 936,172 vehicles. The Model S Plaid is Telsar’s fastest car, traveling from zero to 60 miles per hour in less than two seconds. Tesla’s upcoming CyberTrack made a cameo at an event in Texas on April 7, although it won’t enter production until at least 2023.
Huge increase for BYD
BYD (BYDDF) has no composite rating and 54 has an EPS rating. The BYDDF stock has formed a cup base with 41.34 buy points, though it is currently well below the entry. Shares have returned above the 10-week average as well as the 40-week line after diving earlier this year. They ran fast in the last half of 2021. China’s BYD is Hong Kong-listed, trading over the counter in the United States
Chinese car and battery giant BYD has completely switched to battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). Ignoring the Covid-19 lockdown, BYD boosted EV sales in April. That’s three times more than EV sales in 2021, and could do so again in 2022. Supported by Warren Buffett Berkshire Hathaway (BRKB), BYD sells Tang electric SUV in Norway. This is likely to significantly increase exports in the second half of 2022, with Europe and Australia being the main markets.
A major EV battery manufacturer and supplier, BYD also makes its own chip, which has allowed rapid expansion in 2021 and so far this year.
New Lee Auto EV loom
Lee Auto Stock has a Comp rating of 68 and an EPS rating of 75 Like most China-based stocks, Lee Auto trades in American Depository Receipts. Lee stocks rose to an intermediate low on May 9 and are trying to bounce back above the 10-week moving average.
Delisting fears and supply shortages are the only two factors that affect China EV stocks.
China EV Startup builds a single premium electric car – the Li One SUV. After delays due to the growth of China’s Covid, the L9 SUV, Li Auto’s second EV, will arrive in the third quarter. The Lee One is actually a hybrid, with a smaller petrol engine to extend the range. Lee Auto’s EV sales slowed sharply in April, breaking a long growth trend. In 2021, Lee EV sales nearly tripled. Revenue is growing at triple-digit speeds, though consistent profits are off the beaten path.
Lithium ETF holds Tesla, BYD
Global X Lithium and Battery Technology ETF has grown exponentially for most of 2020 and 2021. The ETF has fallen sharply since the November peak A low-level rally in late April took LIT just below the 10-week average. It has a relative strength rating of 61 out of 99 possible. This means it surpassed 61% of all stock in IBD’s database last year. Includes its largest holding Albemarle (ALB), as well as China’s BYD and Tesla. LIT funds invest in lithium mines and refineries, as well as battery manufacturers. Most current electric vehicles and plug-ins use hybrid EV lithium-ion batteries.
Albemarle: Lithium for EV batteries
ALB stock has a 92 composite score and a 70 EPS rating. Albemarle 243-248 seeks to clear resistance around the price level. Shares bounced back from 10- and 40-week averages, supported by a sharply rising RS line.
Albemarle, one of the world’s largest lithium miners, expects to benefit from higher lithium prices, as demand exceeds supply. It is one of the largest suppliers of lithium for EV batteries. It is also said to be the owner of some of the purest lithium mines in the world. The Charlotte, NC-based company is expanding its capacity and raising 2022 financial guidelines in early May.
Tesla vs BYD: Which Booming Ev Giant Is Better To Buy?
In the near future, EV stocks will continue to face chip limitations but they have started to decline. Battery costs and shortages can be a problem in the meantime, as the supply of lithium and other raw materials struggles to keep up with demand. In the long run, there could be more government support for electric vehicles, while greater EV production will help reduce car prices.
Find Aparna Narayanan on Twitter @IBD_Aparna.
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