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With the electric vehicle story only expected to accelerate, here are just some of the top EV stock picks for 2023. We already know that governments all over the world want millions of them on the roads in the future. In addition, we know President Biden wants 50% of all new vehicle sales to be electric.
We also now know that electric vehicle sales jumped 70% in the first nine months of 2022, as compared to 2021, as sales of conventional cars and trucks fell about 15%, according to the New York Times, which added,
“That growth could have been stronger if automakers had been able to make more electric cars. Many manufacturers have long waiting lists because production has been limited by shortages of computer chips, batteries, and other parts.”
Now, as we head into 2023, electric vehicle sales could accelerate even more. Then, by 2027, says CleanTechnica.com, electric vehicle sales could account for 90% market share. In short, investors would be smart to back up the truck on EV stocks.
|DRIV||Global X Autonomous and EVs ETF||$23.07|
|FDRV||Fidelity EVs and Future Transportation ETF||$17.75|
Source: Khairil Azhar Junos/Shutterstock.com
For most of 2022, Tesla (NASDAQ:TSLA) was a slow-motion car wreck. Shares plummeted from about $400 to $167 on earnings, and fear Elon Musk was pulling his attention from the company. But don’t count out the King of EVs just yet.
We have to consider the latest pullback is temporary noise and that Tesla will continue to lead the pack. In addition, demand for its EVs continues to impress in the U.S. and in China. In its most recent quarter, revenue jumped 56% to $21.5 billion. EPS came in at $1.05, which beat expectations for $1.01.
Also, as Wedbush analyst Dan Ives just said, “We view this more of a logistical speed bump rather than the start of a softer delivery trajectory into the [fourth quarter and 2023] and remain bullish on the Tesla story,” he said, as quoted by Barron’s.In addition, analysts believe its new Semi truck could add about $15 billion to Tesla’s top line by 2024, with its first delivery set for Dec. 1 to PepsiCo (NASDAQ:PEP). Plus, the company still believes it can deliver another 450,000 vehicles in the fourth quarter of the year.
Blink Charging (BLNK)
The Biden Administration wants to build out a network of 500,000 EV charging stations by 2030, which will be beneficial for Blink Charging (NASDAQ:BLNK). After all, we can’t have millions of EVs on the roads with no place to charge them. Helping the Inflation Reduction Act should give charging station providers a lift, too.
According to EVConnect.com: Besides credits for EV purchases, the law also restores expired tax credits for installing EV chargers in homes and businesses. As before, this credit is good for up to 30% of the costs of EV charging equipment. For businesses in certain designated areas, however, the limit is expanded from $30,000 to $100,000 per item beginning in 2023.
Earnings haven’t been too shabby, either. BLNK reported a loss of 45 cents a share from $7.9 million in sales, as compared to expectations for a 39-cent loss from $6.2 million in sales. Even though EPS missed expectations, operating profits came ahead of expectations.
Global X Autonomous & EVs ETF (DRIV)
Source: Scharfsinn / Shutterstock
One of the best ways to diversify among EV stocks at less cost is with an exchange-traded fund, or ETF, such as the Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) with an expense ratio of 0.68%.
This ETF invests in,
“companies involved in the development of autonomous vehicle technology, electric vehicles, and EV components and materials. This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt,”
While the DRIV ETF was beaten down to $23, give it time. With an accelerating EV story, I’d like to see this ETF closer to $50.
Fidelity Electric Vehicles and Future Transportation ETF (FDRV)
Another hot EV ETF to consider is the Fidelity Electric Vehicles and Future Transportation ETF (NYSE:FDRV). At $17.75, with an expense ratio of 0.39%, the ETF offers exposure to companies involved in the production of electric and/or autonomous vehicles, components, technology, and other companies that are working to change the future of transportation. Some of its top holdings include Nio (NYSE:NIO), Tesla, Qualcomm(NASDAQ:QCOM), Nvidia Corp. (NASDAQ:NVDA), Intel (NASDAQ:INTC), Aptiv (NYSE:APTV), and Garmin (NYSE:GRMN).
Source: shutterstock.com/Nixx Photography
For most of 2022, it looks like Canoo (NASDAQ:GOEV) drove off a cliff. In fact, after starting the year around $8, the stock is now down to $1.38, left for dead. However, don’t write off this one either. Chairman and CEO Tony Aquila bought 9.009 million shares of the stock at $1.11 each for $10 million. On Aug. 12, he bought 200,000 shares at an average price of $3.98. On Sept. 13, he bought 200,000 shares again at $2.57.
Canoo also just announced several new agreements for its commercial EVs. One included an order for 4,500 EVs from Walmart (NYSE:WMT). Another was an order for 12,000 vehicles from a van rental provider. The company also counts NASA among its list of clients. The company is also acquiring a 120+ acre manufacturing facility in Oklahoma City, which will be used to produce the Lifestyle Delivery Vehicle and the Lifestyle Vehicle.
Even better, the company is delivering its new light tactical vehicle (LTV) to the U.S. Army, which requested an EV that can operate in extreme environments. “The LTV is another milestone proving the power of our technology and how it can be used, even in tactical situations,” added CEO Aquila. “This is a winning algorithm for our customers and company.”
Source: Robert Way / Shutterstock.com
2022 was a disaster for NIO, too. However, it looks like it’s coming back strong. Better, according to Deutsche Bank analyst Edison Yu, the worst may be over. For one, he believes the Chinese government will gradually shift from its zero COVID policy. Two, he believes delivery numbers will start to show improvement with the Dec. report. Helping, the company delivered 14,178 vehicles in Nov., a 41% jump over Oct. For the year, deliveries are up 32% year over year to 106,671. Far better, the company expects to sell between 43,000 and 48,000 EVs in the fourth quarter. Along with stronger delivery numbers, the company is expanding in Europe and is adding new models.
Li Auto (LI)
Source: Robert Way / Shutterstock.com
Slow-motion car wreck, Li Auto (NASDAQ:LI) is showing big signs of life again, too. After plunging from about $40 to $14, the stock is back to $21.30. From here, I’d like to see the stock at $32. Analysts at DBS Bank, for example, just initiated a buy rating with a price target of $29. Jefferies also initiated a buy rating with a $20.66 price target and referred to LI as its “favorite NEV startup,” as noted by TheFly.com.
As we saw with NIO, Li Auto had an uptick in deliveries. For Nov., the company delivered 15,034 vehicles, up about 50% month over month. For the year, deliveries are up to 112,013, a 47% jump year over year. Better, as noted by Barron’s contributor Al Root, “Li sales have been some of the strongest among Chinese EV peers, and its stock has held up better than most.”
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.