Electric car stocks are stocks of the manufacturers of electric vehicles. The sales of electric cars started in 2013 and have demonstrated a steady rally in the past few years. The sales of battery-powered cars will not overpower traditional combustion engine cars till 2030, yet electric car stocks have shown positive returns.
The future for electric vehicles and electric car stocks looks very promising. In just about ten years, every one out of five cars sold is expected to be an electric car, while by 2030, electric vehicles will make about half of the car sales. Electric vehicles support both technological advancement and concerns around pollution.
|TOYOF||Toyota Motor Corp||$15.69||-13.79%||250.4B|
|PLUG||Plug Power Inc||$25.19||-10.61%||14.6B|
|SQM||Sociedad Quimica y Minera de Chile S.A.||$92.79||81.87%||24.8B|
|MGA||Magna International Inc.||$61.26||-27.12%||17.6B|
|NSANY||Nissan Motor Co||$7.61||-31.32%||15.8B|
|BLNK||Blink Charging Co||$23.03||-35.53%||1.2B|
|GELYF||Geely Automobile Holdings||$2.21||-36.68%||178.9B|
State of the Electric Car Industry
This fast-growing sector is currently generating about $1 trillion in revenue. Electric cars are projected to represent 10% of the global automobile market by 2040. The world’s largest electric car company, Tesla, has just produced their cheapest electric car yet: a $35,000 sedan that they hope will hit the mass market. While Tesla is the most popular electric car company, there are many new companies that are creating electric vehicles. Additionally, many of the biggest car manufacturers are creating electric vehicles. This includes Audi, BMW, Hyundai and Toyota.
There are currently more than 100 different electric car models available on the market. At first these new vehicles sold poorly due to their high price but they’ve recently become a popular investment opportunity. As a result, the stock prices of electric car manufacturers have surged.
Factors to Consider Before Investing in Electric Car Stocks
Electric car manufacturing involves the use of cutting-edge technology. Therefore, investors must consider the ability of electric car stocks to meet the technology standards before investing in them.
Additionally, the fundamental strength of electric car stocks should also be kept in mind. Investors must take market capitalization, sales and earnings growth, cash flows, and cost of production into account before investing in electric car stocks.
Investors must also consider electric car manufacturers’ ability to keep up with the competition. For this analysis, the backward integration of manufacturers with battery and lithium suppliers plays a significant role.
If you want to invest in individual electric car stocks, it’s not enough to simply bet on the industry as a whole. While the industry is growing (and will likely continue), there will be both winners and losers. As of now, Tesla has the highest market share, followed by large car companies that have made the shift to electric (i.e. VW Group, GM, Hyundai, etc.).
It can be tempting to invest in a smaller electric car company for the chance of explosive growth (similar to Tesla), but many of the smaller companies will go under. Even companies that were once strong can struggle (i.e. Rivian and Nikola).
Which Electric Car Stocks Should I Buy?
The electric vehicles market is expected to grow at a CAGR of 25.6% during the period from 2019 to 2026. Therefore, many companies are capitalizing on the trend, and numerous electric car stocks trade on the US stock exchanges. We have compiled a list of the best electric car stocks for you to select from above.
The top electric car stocks to buy do not only include stocks of the automobile manufacturers. They also consist of stocks of the companies that provide electronic safety equipment, connector systems, batteries, and other structural components of electric vehicles.
The suppliers to the automobile industry are equally well-positioned to gain from the electric vehicles boom in the future. In certain cases, some of these companies are even better positioned than the actual manufacturers due to the risk involved in running an electric car company.
Investors who want to bet on the sector as a whole may choose to invest in an electric vehicle ETF.