The electric vehicle boom is only set to accelerate, which makes now a great time to look for electric vehicle stocks trading at a discount.
Global leaders are demanding millions of EV on the roads in an effort to reduce emissions. The U.S. wants to reduce emissions by 52%. Europe is targeting 55%. China even says it will stop releasing carbon dioxide in the next 40 years.
Better, the International Energy Agency says we could see up to 135 million electric vehicles on the roads in the next decade. Even analysts over at Ernst & Young say EVs could outpace combustion engines globally over the next decade. In the U.S., 5.6% of the 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 says GM will sell the most electric vehicles by 2025. In fact, she’s doubling down on her prediction she’ll outsell Elon Musk in sales by then, as well.
With the world going green, electric vehicle sales will continue to accelerate.
And if that’s the case, investors may want to buy into the top electric vehicle stocks trading at a discount.
| TSLA | Tesla | $906.20 |
| NIO | Nio | $20.30 |
| LI | Li Auto | $33.95 |
| XPEV | Xpeng | $24.08 |
| DRIV | Global X Autonomous & Electric Vehicles ETF | $24.28 |
| LIT | Global X Lithium & Battery Tech ETF | $75.70 |
| IDRV | iShares Self-Driving EV and Tech ETF | $41 |
Tesla (TSLA)
You can’t have a list of EV stocks, and not include Tesla (NASDAQ:TSLA).
After plunging from about $1,100 to support around $680, the EV stock is starting to accelerate higher. Last trading near $900, I’d like to see it back at $1,100 in the near term.
In its most recent quarter, the numbers allayed some concerns. The company beat on both the top and bottom lines. In fact, according to Wedbush analysts Dan Ives and John Katsingris, “The quarter was better than feared with healthy guidance for 2H by Musk & Co. that look achievable with no margin for error.”
“The electric automaker’s revenue took a significant quarter-over-quarter hit in Q2, falling from $18.76 billion in Q1 2022, but rose year-over-year from $11.95 billion,” reported Yahoo Finance.
Nio (NIO)
Another hot EV stock is Nio (NYSE:NIO).
In recent weeks, Nio fell from about $24 to under $20, where it appears to have caught strong support. From the current price, I’d like to see it again challenge prior resistance around $24 a share.
Helping it toward that goal, in June, the company delivered 12,691 vehicles, up 60.3% over the year-ago quarter. Also, during its full second quarter, it delivered a total of 25,059 vehicles, an increase of over 14%.
In addition, China has rolled out new incentives to improve demand for EVs, including lower loan rates.
NIO also just confirmed its annual general meeting for Aug. 25. Better, the company is still on track to expand into Germany, Sweden, the Netherlands and Denmark. Plus, the company just forecast second-quarter revenue growth of 10.6% to 19.4% year over year.
Li Auto (LI)
Investors may also want to consider Li Auto (NASDAQ:LI).
After rocketing from about $20 to $41, the EV stock pulled back to around $33. While slightly overbought at the moment, I believe the stock could accelerate to higher highs.
In its second quarter, the company said it delivered 28,687 vehicles. That’s 63.2% growth year over year. The company also just unveiled its Li L9 in June, which could boost deliveries in the fourth quarter and through 2023.
Li Auto already has over 30,000 pre-bookings for the L9, according to a recent company press release.
Earnings have been just as impressive. According to the company, vehicle sales came in at $1.47 billion in Q1 2022, an increase of about 168.7% year over year. Vehicle margins came in at 22.3% in Q1 2022, as compared to 16.9% year over year. Total revenues soared 167.5% to $1.51 billion. Gross profits were up about 251% to $341.3 million.
Xpeng (XPEV)
Oversold, shares of Xpeng (NYSE:XPEV) appear to have just bottomed out around $24.87. Better, RSI, MACD, and Williams’ %R appear to have bottomed out as well. From a current price of $24.87, I’d like to see the XPEV stock again challenge $36.
In recent weeks, the company reported June deliveries of 15,295 Smart EVs – a 133% increase over the same month last year, and a 51% increase month over month. For the second quarter, XPEV delivered 34,422 Smart EVs. Year to date, deliveries ran to 68,983 – a 124% jump year over year.
Even better, the company is quickly expanding in Europe, with locations in Sweden and the Netherlands. In addition, in August, the company will start accepting preorders for its new G9 SUV followed by a launch in September.
It also plans to release its new City Navigation Guided Pilot after getting approvals.
Global X Autonomous & Electric Vehicles ETF (DRIV)
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%, or $68 per $10,000 invested annually, this ETF invests in “companies involved in the development of autonomous vehicle technology, electric vehicles (“EVs”), 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,” as noted by Global X.
With this ETF, investors have exposure to EV and autonomous stocks, such as Tesla, Nio, Qualcomm (NASDAQ:QCOM) and Nvidia (NASDAQ:NVDA), for example. It also does so at less cost. For example, if you were to buy 10 shares of every listed stock, it would cost thousands. However, with this ETF you can gain exposure at under $25 a share.
Global X Lithium ETF (LIT)
Investors can also look at the Global X Lithium ETF (NYSEARCA:LIT).
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, it does so at less cost. At $75 a share, with an expense ratio of 0.75%, the LIT ETF offers exposure to stocks, such as Albemarle (NYSE:ALB), BYD (OTCMKTS:BYDDY), Tesla, Livent (NYSE:LTHM), Lithium Americas (NYSE:LAC) and Piedmont Lithium (NASDAQ:PLL) to name a few.
From a current price of $75.70, I’d like to see the LIT ETF run back to $80.
iShares Self-Driving EV and Tech ETF (IDRV)
The iShares Self-Driving EV and Tech ETF (NYSEARCA:IDRV), with an expense ratio of 0.47%, invests in growth and innovation in and around EVs, battery technology and autonomous driving.
Almost half of this fund is made up of consumer discretionary stocks, and while over half of it is invested in the U.S., it also has significant investments in Japan, Germany, South Korea, China and more.
IDRV is another solid ETF in this industry, with exposure to top stocks such as Tesla, Qualcomm, Apple (NASDAQ:AAPL), Toyota Motor (NYSE:TM), Intel (NASDAQ:INTC), Nvidia and General Motors, to name a few.
It’s currently trading at around $41 a share, and I’d like to see it challenge $48 again.
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.