Are These Electric Vehicle Stocks On Your Watchlist Right Now?
Electric vehicle (EV) stocks have been some of the hottest stocks this year in the stock market. Investors who had these stocks in their portfolio earlier this year have already enjoyed huge gains. Returns on pure-play EV stocks ranged from fivefold to over 10 times after all. In contrast, stocks of conventional combustion engine companies returned almost nothing at best. This shift to EV was undeniable this year and this momentum will likely carry on in 2021. Why is that so, you may ask?
Battery prices, one of the biggest costs for electric cars, have plummeted over the years. For instance, lithium-ion battery pack prices have fallen by over 80% in the last decade. EV sales have jumped from 450,000 in 2015 to 2.1 million in 2019. With battery energy improving, more charging infrastructures being built, and falling battery prices, EV sales will only go up. BloombergNEF reports that by 2030, there will be almost 26 million EV sales per year. This will make up about 28% of new car sales in the same year. Could this just be the beginning of the EV industry in general?
Looking at top electric vehicle stocks we have in the stock market today, like Tesla (TSLA Stock Report), you may get a glimpse of what prospects lie ahead for the EV industry. Tesla has seen its share price increase by over 600% in this year alone. Having the first-mover advantage certainly helps, but how will this play out for other top EV stocks? Other EV stocks like Xpeng (XPEV Stock Report) have more than doubled in share price since its IPO in late August. With that in mind, let us look at this list of electric vehicle stocks that could bring huge gains in the years to come.
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Electric Vehicle Stocks To Buy [Or Avoid]: Nikola Corporation
Nikola (NKLA Stock Report) is an EV company that is a global leader in zero-emissions transportation systems. The company has had quite a dramatic year, to say the least. From the resignation of its former Executive Chairman, Trevor Milton, due to fraud allegations to the downsizing of an important partnership with General Motors, things did look bleak for the company. However, Nikola stock soared by over 18% yesterday after JPMorgan said in a note that it sees 2021 being a less drama-filled year that will turn generally positive for the EV company.
The company has made significant progress on key milestones in its progress to manufacturing its brand of electric vehicles. Company CEO Mark Russell has this to say, “We delivered on our commitment to assembling the first Nikola Tre BEV (Battery Electric Vehicle) prototypes and are continuing to work with customers on the prospective and previously announced BEV truck orders. I look forward to building on our momentum as we execute our strategy and lay the groundwork to become an integrated zero-emissions transportation solutions leader.” This would of course set the foundation for the company in 2021.
Nikola has also assembled its Tre BEV prototypes at IVECO’s industrial complex in Ulm, Germany. The company also expects to start building its second batch of prototypes by the first quarter of 2021. The company still maintains that it intends to start delivering its Tre BEVs in 2021 and also plans to build out a commercial hydrogen station next year as well. With the company’s direction and strategic initiatives seemingly on the right footing, would you be adding NKLA stock to your watchlist?
Electric Vehicle Stocks To Buy [Or Avoid]: NIO Inc.
Perhaps one of the biggest winners in the EV industry for 2020 would be NIO (NIO Stock Report). NIO is a pioneer in China’s premium EV market. The company designs and jointly manufactures EVs and innovates in next-generation technologies like connectivity, autonomous driving, and artificial intelligence. The Shanghai-based company has seen an explosive growth of over 1000% in its share prices year-to-date.
In the company’s third-quarter fiscal posted last month, NIO reports that its total revenue has reached $666.6 million, which is a staggering 146.4% increase year-over-year. It also posted a quarterly delivery of 12,206 vehicles for its ES8, ES6, and EC6. This represents a 154% increase from a year earlier. NIO has been investing heavily into expanding its production capacity after all.
NIO also posted a new monthly record in November by delivering 5,291 vehicles. This is a 109.3% increase year-over-year. The company’s success is due to its location in China, being the largest consumer market for EVs in the world. NIO has also received rave reviews after introducing its battery-as-a-service (BaaS) program. BaaS allows buyers to reduce the upfront cost of their EVs through a monthly fee. It allows buyers to replace or upgrade batteries in the future while tying buyers to the company for a long time to come. With that in mind, would you consider having NIO stock in your portfolio?
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Electric Vehicle Stocks To Buy [Or Avoid]: General Motors Company
General Motors (GM Stock Report) is a multinational corporation that is based in Detroit. GM is the largest automobile manufacturer in the U.S. and one of the largest in the world. The company is currently ranked #18 on the Fortune 500 by total revenue. GM of course is known for its core automobile brands; Chevrolet, Buick, GMC, and Cadillac. The company’s share price has been up by over 150% since March.
How has the company been doing financially? In the company’s third-quarter fiscal reported last month, GM performed respectably. The company recorded a revenue of $37.8 billion with an income of $4 billion. The company also boasted $9.9 billion in operating cash flow and earnings per share of $2.78. Despite the implications of the coronavirus pandemic, GM has shown its resilience by keeping its teams safe, conserving cash, and preserving liquidity. It has also kept all its critical product programs on track.
The company has been making significant investments in product development and manufacturing to accelerate its progress towards an all-electric future. Late last month, GM also signed a non-binding memorandum of understanding with Nikola for a global supply agreement. GM will provide its Hydrotec fuel cell system for Nikola’s Class 7/8 semi-trucks. This agreement would be a testimony to GM’s fuel cell technology expertise. All things considered, would you have GM stock as a top EV stock to buy before 2021?