How to Buy Electric Vehicle (EV) Stocks

Contributor, Benzinga

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Between soaring giants like Tesla (NASDAQ: TSLA) to unexpected winners like Blink Charging (NASDAQ: BLNK), the realm of electric vehicles (or “EVs” for short) has plenty of potential picks for investors. 

The electric vehicle industry is currently valued at around $550 billion — and with continued pushes for limiting fossil fuel consumption, it’s possible that the EV market will continue to expand throughout 2021 and beyond.

If you’re interested in investing in EV stocks, the 1st step is to open a brokerage account and familiarize yourself with the current market. Our guide will help you learn more about electric vehicles stocks, and choose where to open an account to place your 1st buy order. 

How to Buy Electric Vehicle Stocks

The 1st step to investing in any type of electric vehicle stock is to open a brokerage account. No matter if you’re buying stocks you plan to hold for years to come or affordable stocks under $20 you think will rise in value, your broker can help facilitate your transactions through buy and sell orders.  

Pick a Brokerage

If you don’t already have a brokerage account, you must create 1 before you start investing. Not sure where to start? Consider starting by browsing a few of the best brokers for beginners below.   

get started securely through Webull’s website
Best For
Intermediate Traders and Investors
N/A
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
get started securely through Moomoo’s website
Best For
Active Traders
N/A
1 Minute Review

Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.

Get started right away by downloading Moomoo to your phone, tablet or another mobile device.

Best For
  • Cost-conscious traders
  • Active and Advanced traders
Pros
  • Over 8,000 different stocks that can be sold short
  • Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
  • No minimum deposit to open an account.
Cons
  • No chat support
get started securely through Interactive Broker’s website
Best For
GlobalAnalyst Product
N/A
1 Minute Review

This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.

Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.

Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.

Best For
  • Price earnings growth valuations
Pros
  • Easily evaluate investment opportunities
Cons
get started securely through CenterPoint Securities’s website
Best For
Momentum traders
N/A
1 Minute Review

CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.

Best For
  • Intermediate to Advanced traders
  • High-volume traders
  • Momentum traders
  • Short sellers
Pros
  • Unrivaled access to short inventory
  • Flexible order routing for improved executions
  • Discounts for active traders
  • Advanced platform with fast executions
  • Reliable customer service
Cons
  • Not designed for beginner or low-volume traders

Decide How Many Shares You Want

After your account is open and funded, decide how many shares of your stock of choice you’d like to purchase. A good place to begin is by setting a budget and exploring a few popular electric vehicle companies’ current market rates. 

Find a company that you’re interested in investing in, and use its current market price to determine how many shares you want to buy. We recommend that you diversify your portfolio by investing in a few different EV stocks rather than placing all of your money into a single company’s stock. 

Choose Your Order Type

Once you decide how many shares of stock you want to buy, you’ll place an order through your broker’s platform. An order tells your broker which stock you want to buy and how many shares you’re buying. It can also help you specify a price to buy or sell at, as well as limits on when you’d like to buy. 

There are multiple types of orders that you can place — let’s take a look at some common terms you’ll see when you place your 1st order. 

Bid

The bid price is the highest price that a buyer is willing to pay for 1 share of a particular stock. A bid isn’t an order type, but it can help you understand how prices are changing within a stock’s history or the market as a whole.

Ask

The ask price is the lowest price that a seller is willing to accept in exchange for 1 share of stock that they own. Like the bid price, an ask isn’t an individual order type. However, analyzing both the bid and the ask and how they’re changing can help you determine the most advantageous time to buy. 

Spread

The bid-ask spread (sometimes referred to simply as the “spread”) is the difference between the bid price and the ask price. Some stocks under $10 with lower liquidity have large spreads, while stocks with high volumes tend to have low spreads. 

The spread can influence the price you pay for your stock or the price you receive as a seller, so be sure to mind the spread before you place an order. 

Limit Order

A limit order tells your broker that you want to buy a set number of shares of stock at a particular price. For example, if you were purchasing shares of Blink Charging, you might place an order to buy 100 shares at $28 each. 

Your broker will fill the order so long as they can buy shares of Blink Charging for $28 or less. If the price of Blink Charging shares rises above $28, your order will not be filled. This gives you more control over the price that you pay for each share of stock.  

Market Order

A market order tells your broker that you want to buy a select number of shares of stock at the current market rate. When you place a market order, you won’t specify a price that you need your order to be filled at. 

Instead your broker will fill the order as quickly as possible at whatever price the stock is currently trading at. Market orders are more likely to be filled than limit orders, but you might end up paying more per share, as market conditions are constantly changing.   

Stop-Loss Order

A stop-loss order is an order to buy or sell a particular stock once it reaches a certain price threshold. For example, if you purchase 10 shares of Tesla stock at $600 a share, you might set a stop-loss order to sell your shares if the price dips down to $540. This prevents you from losing more than 10% of your initial investment.    

Stop-Limit Order

A stop-limit order combines the features of a stop-loss order and a limit order. For example, imagine that Blink Charging stock is currently trending at $28 a share but has been climbing in price. 

You might set a stop-limit order with a stop price of $30 and a limit price of $35. If Blink Charging stock rises above $30, you broker will begin filling the order. However, if prices rise above $35, the broker will stop executing the order until prices fall again.     

Execute Your Trade

After you’ve placed your order through your brokerage platform, feel free to sit back and relax. Your broker will execute the order on your behalf, and you’ll see your shares in your brokerage account as soon the order is complete. 

If your broker cannot fill your order, they’ll typically cancel it by the end of the trading day unless you specify otherwise. 

Electric Vehicle Stock History

Electric vehicle stocks have a long history on the market. The term “electric vehicle stock” doesn’t refer to a single company. Instead, it refers to the network of vehicle, battery and charging station manufacturers that make up the market.  

The most well-known electric vehicle stock is Tesla, the California-based clean energy company famous for producing electric cars and trucks. Like many electric vehicle stocks, Tesla has seen a surge in interest since the conclusion of the 2020 presidential election. 

Tesla’s stock reached an all-time high of $900.40 in February and is one of the beneficiaries of the bill.

Source

Tesla’s stock has been on a sharp rise since the conclusion of the 2020 presidential election.

EV manufacturers are far from the only winners when it comes to the sudden surge in clean driving technology. Another example of a soaring EV stock is Plug Power (NASDAQ: PLUG) which has seen its stock soar in value from $14.00 to $24.44 in just a little more than a month. Plug Power produces hydrogen fuel cells for electric vehicles — another essential component in the growing clean energy sector. 

Pros to Buying Electric Vehicle Stocks

Electric vehicle stocks have surged since the conclusion of the 2020 presidential election. Electric vehicle companies may create nearly 1 million jobs to expand electric vehicle charging stations.

And if clean, American-made electricity includes electric vehicles and related industries, these stocks could continue to climb. The possibility of tax credits and loan options to electric vehicle manufacturers could also encourage another surge in value. 

Cons to Buying Electric Vehicle Stocks

The industry still faces a number of hurdles that impede wider implementation of EV technology. Most electric vehicles require a very large initial investment. Most affordable models in the industry starting at $30,000 or more. 

Until technology advances to the point where EV models are more widely available, consumers can expect to pay between $10,000 and $50,000 more for an electric vehicle than a similar class of gas-powered vehicle.

Charging station availability is also a major factor holding back the industry. Most EVs have limited ranges of 60 to 300 miles per charge. A single long drive can end in a call to AAA if the driver can’t locate a charging port on the road. Charging can also take anywhere from 15 to 20 hours on lower-end models, which is a major drawback when you consider that filling a car with a full tank of gas only takes a few minutes. 

Invest in Clean Energy

No matter if you’re investing in EV stocks to add to your long-term portfolio or you’re searching for stocks under $5 suitable for day trading, it’s important to remember that stocks can decrease in value at any time. 

If you’re interested in the clean energy market, you might want to consider investing in a clean energy ETF (like the iShares Global Clean Energy ETF) instead of individual stocks. An exchange traded fund (ETF) is a “bundle” of stocks that trade in the same way as a single share would, providing you with an instant level of diversification for your portfolio. 

Electric vehicle stocks are worth your review. Take a look at EV stocks, and diversify your portfolio with an investment in clean energy today.