Ford Motor (NYSE:F)
One of the most iconic American companies, Ford introduced the concept of automotive mass production through its assembly line. With that invention came this nation’s love for the open road. Later on, Ford and other American automakers started to lose their way. Fortunately, its groundbreaking Mustang Mach-E, an electric SUV that competes with Tesla’s Model Y, appears to have put the company back on track. Earlier this year, Ford was one of the stocks under $10.
Toyota Motor (NYSE:TM)
Once a joke and a novelty, no one today laughs at Toyota, which stands among the automotive greats. While it gained market dominance through its inimitable reliability and dollar-for-value proposition, Toyota shifted its attention toward EVs and other alternative-fueled vehicles. Currently, the auto manufacturer is hard at work researching and developing a solid-state battery (SSB). If successful, this could impart a paradigm shift in the industry because of the SSB’s greater capacity and performance output.
An iconic global brand, Volkswagen delivered German craftsmanship and precision engineering at a much more affordable price than its premium luxury competitors. Today, Volkswagen is an automotive powerhouse, controlling a wide range of companies, from its namesake brand to outfits like Lamborghini and Porsche. In fact, the latter is bringing electric transportation to the enthusiast market with the Porsche Taycan.
ChargePoint Hldgs (NYSE:CHPT)
ChargePoint Holdings Inc is an EV charging network provider committed to enabling the electrification of mobility for all people and goods. It is creating a new fueling network to move people and goods on electricity. Its cloud subscription platform and software-defined charging hardware are designed to include options for every charging scenario from home and multifamily to the workplace, parking, hospitality, retail, and transport fleets of all types. It provides access to several places to charge in North America and Europe.
Blink Charging (NASDAQ:BLNK)
Among the growing number of EV stocks that are not tied to auto manufacturing but rather to EV charging-station infrastructure, Blink Charging offered early stakeholders quite a ride. Throughout the first half of 2020, BLNK was one of the stocks under $5. Now, that narrative changed. Nevertheless, for EVs to roll out successfully, adequate charging infrastructure must exist. Blink serves a crucial role in this market, making it a relevant longer-term investment.
Boyd Gaming (NYSE:BYD)
BYD Company Limited and its subsidiaries work in the sphere of research, development, manufacture and sale of automobiles and related products in the People’s Republic of China and internationally, operating in three segments: The Secondary Rechargeable Batteries and Photovoltaic; Mobile Phone Components, Assembly and Other Products; and Automobiles, Automobile-Related Products and Other Products.
For well over a century, the fossil fuels industry not only dominated the discussion regarding automotive transportation, it was the only topic available. But over the past several years, the auto industry went through a rethink thanks in no small part to Tesla (NASDAQ: TSLA). Proving that electric vehicles (EVs) were not only fancy science projects but also commercially viable products, TSLA’s valuation soared to the stratosphere. Investors should learn about electric vehicle stocks as the EV market starts to keep pace with the gasoline car, bending the public’s ear and making every EV maker a little more visible.
Now, the entire sector started pivoting toward EVs, catapulting a massive race for dominance. This dynamic potentially sets up an intriguing and profitable environment for the best electric vehicle stocks.
Quick Look at the Best Electric Vehicle Stocks:
- ChargePoint Holdings Inc
- Blink Charging
- BYD Company Limited
Overview: Electric Vehicle Stocks
When most hear “electric vehicle,” people instinctively think about Tesla. Undoubtedly, the technology and EV manufacturing firm brought the concept to the mainstream with a mix of sleek sedans and SUVs that consumers ravenously purchased. However, you may be surprised to learn that EVs go back centuries. The concept of a charging station, however, is a bit more recent. So, how can you get away from the gas station, invest in companies that are reaping tax credits and buy in on the ground floor of automakers that are changing the face of the industry?
In fact, the history of Porsche, one of the world’s most revered performance-car brands, started out with an electric motor. In 1898, Ferdinand Porsche designed a rudimentary EV that had a top speed of 25 kilometers per hour (or approximately 15.5 miles per hour). Ferdinand went on to design the original Volkswagen (the car for the people,) but he could not have imagined what EV charging would be today, home charging options and how massive the vehicle market has become.
Despite such early experiments, nothing could beat the energy density that fossil fuels provided. Though incredibly dirty, a gallon of gas can reliably fuel a vehicle for many miles (and often to a level determined by the manufacturer and printed on the sticker at the dealership.) This figure became such a big deal among drivers that many often purchased their vehicles based on gas mileage estimates alone. Further, drivers found it easier and quicker to refuel a car than to charge an EV. In fact, charging networks could make it even easier to charge car batteries for a road trip, daily commute, etc.
For decades since, the energy-density advantage prevented non-fossil fuel alternatives from challenging combustion-based cars. But with the advancement of lithium-ion battery technology, EVs became much more practical, thereby stealing market share from combustion cars. As the market capitalization of many of these companies grows, car stocks can all be lifted on some level.
Though steep challenges remain, many automotive experts consider EVs to be the future of transportation, which then leads to a potential opportunity for electric vehicle stocks. So, which auto stocks are the best bet for those who wish to diversify in both the energy and auto industries? The automotive industry gives you several options for diversification, including the Polestar 2, Nissan Leaf, Chevrolet Silverado EV, Tesla Model S, Chevrolet Bolt EV and more. This means that you can gain exposure to the car industry through several manufacturers.
Best Online Brokers for Electric Vehicle Stocks
Thanks to the ever-rising popularity of EVs, you can technically use any broker to acquire electric vehicle stocks. That said, if you’re really interested in this space, you should consider platforms that offer favorable terms for over-the-counter (OTC) stocks and special purpose acquisition companies (SPACs).
Why? Primarily, increased competition translates to foreign automakers researching and developing their own EVs. Ford Motor Company and General Motors are pushing forward with EVs, they often perform better than, for example, Rivian stock. Because many of these companies list their equity units on OTC markets, you should consider a brokerage that facilitates such trades with minimal fees.
Also, new EV competitors increasingly choose SPACs as their vehicle to go public. To get in on the ground floor with such enterprises, you should research SPAC-friendly platforms. Below is a list of brokers for your consideration, remembering that when you go beyond the combustion engine, you will see a whole new side of the auto industry. This also means that you need to choose a broker that makes you feel comfortable and helps you get into the auto sector properly.
Features to Look for in Electric Vehicle Stocks
- Distinct product: Ask any consumer auto expert and more often than not, they recommend prospective buyers consider fundamental attributes such as reliability, cost of ownership and overall quality. But when it comes down to it, humans are visceral creatures. Backed by research and recognized by common sense, many people base their purchasing decisions on vehicle aesthetics. Therefore, it’s important that the core product is distinctive and resonates with the consumer base.
- Viable business plan: As recent EV-sector volatility demonstrated, EV stocks are not for the faint of heart. In some cases, EV firms are aspirational, with no earnings per share and no revenue to justify their valuation. Even Tesla sells its vehicles at a loss if you back out the company’s regulatory credit sales. Therefore, if you’re going to take a shot in this market, do so on a credible business plan.
- Leadership: Competing in the EV arena is arguably one of the most difficult settings. First, you have Tesla’s dominance. Second, EVs still only represent a fraction of global auto sales, translating to a massive hurdle in convincing the rest of the world to make the switch to electric. It can happen, but it’s going to take strong leadership.
An Electrifying Opportunity for the Patient Gambler
When Ferdinand Porsche developed his electric motor, many in the automotive industry envisioned that electric power would rule the roadways. Even in the late 19th to early 20th century, the loud noise and pollution from combustion-based engines bothered onlookers. At that time, though, the technology to produce commercially appealing electric vehicles did not exist.
Fast forward to today and the paradigm has completely shifted. That’s not to say that EV manufacturers don’t have challenges ahead because they do. But the opportunities are even greater, making this an exciting time to profit off a longstanding catalyst.
Frequently Asked Questions
Are electric vehicle stocks a good investment?
Electric vehicles are the future, so electric vehicle stocks are considered a good investment.
Do electric vehicles have a future?
Many cities are mandating electric vehicles in the future, so they are probably a good investment.
What are good investment stocks?
Benzinga offers a list of the best electric vehicle stocks above.
Disclosure: The author has a short position in TSLA and a long position in F at the time of writing.