4 Stocks to Gain From a Growing Electronic Vehicle Market
The electric vehicle (EV) market saw an uptrend in the past decade, with their owners managing impressive savings. After all, the cost involved in running an electric vehicle is much less compared to non-electric ones.
What’s more, electric cars aren’t much under regulatory pressure and are environmentally-friendly as well. Moreover, improved batteries have doubled EV sales throughout 2019. Given such bullish developments, keeping an eye on some solid EV makers will be prudent this year.
EV Market to Flourish in the Near Term
Sales of electronic vehicles had topped 1 million globally in 2017, followed by 2 million in 2018. According to a Deloitte report, EV sales are expected to cross 4 million by 2020 and may touch 21 million in 2030. Currently, EV and hybrids make up around 2% of the total automotive market according to both Deloitte and IHS Markit report. And Deloitte expects that growth in EV sales will lead to 10% market share gain by 2020.
A major issue that is bothering governments across the globe is decarbonization in transportation, and stricter regulation and policies are being framed to combat climate change. In fact, recent discussions on the rollback of 2025 fuel-economy standards and Clean Air Act may lead to stricter regulatory policies that drive the sustainable market growth of EVs.
On the consumer front, EV owners are enjoying the advantages of today’s electric vehicles. They are cost-effective, reliable, and have a much stronger battery and availability of sufficient charging facility. The fear of running out of charge before either reaching destination or a charging point is slowly diminishing. Per a McKinsey report, “battery costs have fallen about 80% since 2010” and are expected to drop by another 50% in coming years.
Moreover, stricter emissions and fuel-economy targets are boosting the environmentally-friendly EV market.
According to a AAA survey in May 2019, 16% of Americans were interested to buy EV as their next new or old car. And why not? With a low long-term cost, EV surely is ahead in the race.
In a survey, Dan Workman, who owns a Chevrolet Bolt and drives 45 minutes up and down daily to his work place said that his car is “super cheap to drive” and “only maintenance” he did in the past two years was to “buy a $10 air filter.”
Watch Out for These 4 EV Makers
Presently, Americans are deeply concerned about rising fuel prices and growing climate crisis and EVs seems to be the best solution in hand. Automakers, thus, are working to tap the growing EV market.
From stalwarts in the automobile space like General Motors Company GM, several smaller private players are aiming to launch multiple EV and hybrids in 2020. Mercedes aims to have at least an EV option for all of its vehicle models by 2022. In fact, Lunaz, the luxury car maker is also set to retrofit its classic models with 21st century conveniences like cruise control and regenerative braking to enter in the hybrid and EV car race.
Let us look at some of the big players in the EV market.
Tesla, Inc. TSLA designs, develops, manufactures and sells electric vehicles and energy generation and storage systems across the globe. Tesla’s EVs are ahead in the race, banking on a longer battery life, ease in software updates and its collection of real-world driving data. In 2018 the automaker sold around 140,000 cars of Model 3, making it the best-selling EV in America.
This industry leader’s Model S had won the bestselling plug-in vehicle between 2015 and 2017 and was edged out by its own Model 3 in 2018. At the LA Auto Show in November 2019, Tesla launched Cybertruck to expand its EV portfolio along with a battery-powered ATV. The company’s expected earnings growth rate for this year is 62.9% compared with the Zacks industry’s projected earnings growth of 7.8%.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 36.9% upward over the past 60 days.Tesla carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Toyota Motor Corporation TM designs, manufactures, assembles, and sells passenger vehicles, minivans and commercial vehicles, and related parts and accessories. The company showcased it’s production-ready version of ultra-compact battery electric vehicle (BEV) at the 2019 Tokyo Motor Show. Toyota has many plug-in hybrids in line that includes 2021 Toyota RAV4 Prime.
The company’s expected earnings growth rate for 2020 is 32.3% against the Zacks industry’s projected earnings decline of 13.5%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised nearly 4% upward over the past 60 days.Toyota carries a Zacks Rank #3 (Hold).
Ford Motor Company F designs, manufactures, markets and services cars, trucks, sport utility vehicles and electrified vehicles worldwide.
Ford's Mustang, the iconic American 1960s muscle car is getting revamped into Mach-E redesign. The company has got along with Shelby designers to create a traditional-looking electric SUV that could resemble the iconic Mustang sedan. The Mustang Mach-E is scheduled for release in the summer of 2020. In fact, in November, just after unveiling the Mach-E in Los Angeles it began taking $500 refundable reservations. Ford carries a Zacks Rank #3.
General Motors Company designs, builds, and sells cars, trucks, crossovers and automobile parts. It markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, Jiefang, and Wuling brand names worldwide.
The company’s Chevrolet Bolt has been the nation's second-most popular electric vehicle. In December 2019, GM announced that most of its Cadillacs brand vehicles will be electrified by the end of 2020s. The company’s expected earnings growth rate for 2020 is 25.5%. General Motors carries a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Ford Motor Company (F): Free Stock Analysis Report
General Motors Company (GM): Free Stock Analysis Report
Tesla, Inc. (TSLA): Free Stock Analysis Report
Toyota Motor Corporation (TM): Free Stock Analysis Report
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