The EV boom is only accelerating, making this a great time to look for EV stocks trading at a discount.
World leaders are demanding millions of electric vehicles on the roads in a bid to reduce emissions. The United States wants to reduce emissions by 52%. Europe is aiming for 55%. China even says it will stop emitting carbon dioxide within the next 40 years.
Better still, the International Energy Agency says we could see up to 135 million electric vehicles on the roads over the next decade. Even Ernst & Young analysts say electric vehicles could overtake combustion engines worldwide within the next decade. In the United States, 5.6% of cars sold in the last quarter were electric, according to MarketWatch.com contributor Sean Tucker.
Things are heating up so fast that General Motors’ (NYSE:GM) CEO Mary Barra has said GM will sell the most electric vehicles by 2025. In fact, she’s doubling down on her prediction that it will overtake Elon Musk in sales by then as well.
With the world going green, electric vehicle sales will continue to accelerate.
And if so, investors may want to buy the major electric vehicle stocks that are trading at a discount.
|CONDUCT||ETF Global X Autonomous & Electric Vehicles||$24.28|
|BED||Global X Lithium & Battery Tech ETF||$75.70|
|IDRV||iShares Self-Driving EV and Tech ETF||$41|
You can’t have an EV inventory list and not include You’re here (NASDAQ:TSLA).
After plunging from around $1,100 to support around $680, the EV stock is starting to pick up speed. Last traded close to $900, would like to see it back to $1,100 short term.
In its most recent quarter, the numbers eased some concerns. The company beat on both the top and bottom results. In fact, according to Wedbush analysts Dan Ives and John Katsingris, “The quarter was better than expected with healthy guidance for 2H by Musk & Co. looking achievable with no margin for error.”
The electric carmaker’s revenue took a heavy hit quarter-over-quarter in the second quarter, falling from $18.76 billion in the first quarter of 2022, but rose year-over-year from of $11.95 billion,” reported Yahoo finance.
Another hot EV stock is Nio (NYSE:NIO).
Over the past few weeks, Nio has fallen from around $24 to below $20, where it appears to have gained strong support. From the current price, I would like to see it again challenge the prior resistance around $24 per share.
To help achieve this goal, the company delivered 12,691 vehicles in June, up 60.3% from the year-ago quarter. Additionally, in its second full quarter, it delivered a total of 25,059 vehicles, an increase of more than 14%.
Additionally, China has introduced new incentives to improve demand for electric vehicles, including lower loan rates.
NIO has also just confirmed its August 25 Annual General Meeting. Better, the company is still on the right track to develop in Germany, Sweden, the Netherlands and Denmark. Additionally, the company just forecast second-quarter revenue growth of 10.6% to 19.4% year-over-year.
Li Auto (LI)
Investors may also consider Li-Auto (NASDAQ:LI).
After climbing around $20 to $41, the EV stock is back to around $33. Although slightly overbought at the moment, I think the stock could accelerate to higher highs.
In the second quarter, the company said it delivered 28,687 vehicles. That’s a 63.2% year-over-year growth. The company also just unveiled its Li L9 in June, which could boost deliveries into the fourth quarter and into 2023.
Li Auto already has more than 30,000 pre-bookings for the L9, according to a recent company press release.
The gains were equally impressive. According to the company, vehicle sales were $1.47 billion in the first quarter of 2022, an increase of about 168.7% year-over-year. Vehicle margins were 22.3% in the first quarter of 2022, compared to 16.9% year-on-year. Total revenue soared 167.5% to $1.51 billion. Gross profit rose approximately 251% to $341.3 million.
Oversold, shares of Xpeng (NYSE:XPEV) appear to have bottomed around $24.87. Better, RSI, MACD and the %R of Williams also seem to have bottomed out. From a current price of $24.87, I would like to see XPEV stock challenge $36 again.
In recent weeks, the company reported June deliveries of 15,295 smart electric vehicles, up 133% from the same month last year and up 51% month-over-month . For the second quarter, XPEV delivered 34,422 smart electric vehicles. Year-to-date shipments were 68,983, a year-on-year jump of 124%.
Even better, the company is growing rapidly in Europe, with locations in Sweden and the Netherlands. Additionally, in August the company will begin accepting pre-orders for its new G9 SUV followed by a launch in September.
It also plans to release its new City Navigation Guided Pilot after securing approvals.
ETF Global X Autonomous & Electric Vehicles (DRIV)
One of the best ways to diversify electric vehicle stocks more affordably is to use an exchange-traded fund, or ETF, such as the ETF Global X Autonomous & Electric Vehicles (NASDAQ:CONDUCT). With an expense ratio of 0.68%, or $68 per $10,000 invested annually, this ETF invests in “companies involved in the development of autonomous vehicle technology, electric vehicles (“EV”) and components and EV materials. This includes companies involved in the development of software and hardware for autonomous vehicles, as well as companies that produce electric vehicles, electric vehicle components such as lithium batteries, and critical electric vehicle materials such as lithium and cobalt,” as noted by Global X.
With this ETF, investors have exposure to stocks of electric and autonomous vehicles, such as Tesla, Nio, Qualcomm (NASDAQ:COMQ) and Nvidia (NASDAQ:NVDA), for example. It also does this at a lower cost. For example, if you were to buy 10 shares of each listed stock, it would cost you thousands. However, with this ETF, you can get exposure at less than $25 per share.
Global X Lithium ETF (LIT)
Investors can also consult the Global X Lithium ETF (NYSEARC:BED).
After all, electric vehicles must have lithium to move. It is a key component of the batteries that currently power them.
Not only does this ETF offer great diversification, but it does so at a lower cost. At $75 per share, with an expense ratio of 0.75%, the LIT ETF offers exposure to stocks, such as Albemarle (NYSE:ALB), BYD (OTCMKTS:BYDDY), You’re here, Livent (NYSE:LTHM), Lithium Americas (NYSE:LAKE) and Piedmont Lithium (NASDAQ:PLL) to only cite a few.
From a current price of $75.70, I would like to see the LIT ETF return to $80.
iShares Self-Driving EV and Tech ETF (IDRV)
The iShares Self-Driving EV and Tech ETF (NYSEARC:IDRV), with an expense ratio of 0.47%, invests in growth and innovation in and around electric vehicles, battery technology and autonomous driving.
Almost half of this fund is made up of consumer discretionary stocks, and although more than half is invested in the United States, it also has significant investments in Japan, Germany, South Korea, China and Moreover.
IDRV is another strong ETF in this sector, with exposure to major stocks such as Tesla, Qualcomm, Apple (NASDAQ:AAPL), Toyota engine (NYSE:MT), Intel (NASDAQ:INTC), Nvidia and General Motors, to name a few.
It is currently trading at around $41 per share, and I would like to see it challenge $48 again.
At the date of publication, Ian Cooper had (neither directly nor indirectly) any position in the securities mentioned. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
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