What Are the Top Electric Vehicle Stocks to Watch?
The electric vehicle (EV) revolution is well under way around the world, with sales of EVs rocketing in recent years. The global desire to clean up our act when it comes to carbon emissions makes it seem that this trend will continue in the future. But which companies stand to benefit?
In this article, we will examine the prospect of investing in the electric vehicle industry, highlight 2 top electric vehicle stocks to consider in 2022 and demonstrate how to invest in EV stocks in 5 steps.
Table of Contents
Investing in EV Stocks
With the world moving towards net-zero carbon emissions by 2050, it seems almost inevitable that the future of the automobile industry is electric.
The UK plans to ban the sale of all new petrol and diesel powered cars and vans by 2030, with all new cars and vans being zero-emission by 2035. The US state of California, which has the largest automobile market in the country, has similar plans in place and the EU is attempting to pass comparable legislation too.
In 2012, 120,000 electric vehicles were sold worldwide. Less than a decade later, in 2021, this figure rose to 6.6 million - 10% of global car sales.
Ten percent of global sales represents impressive growth, but it’s still a long way from 100%, which is surely the end goal. Therefore, it is likely that there will be a lot more investment in this industry in the coming years, with EV stocks set to benefit.
What Are the Best Electric Vehicle Stocks to Watch?
So, what are the best electric vehicle stocks to watch in 2022?
It is important to remember that, when looking for the best EV stocks to buy, what stock is the “best” is often subjective and will depend on various factors, including on your investing goals and your tolerance to risk.
In the following sections, we will take a look at 2 electric vehicle stocks which are well-placed within the industry.
Tesla
The first EV stock on our list should come as absolutely no surprise to most. Whilst it may be predictable, when it comes to electric vehicle manufacturers, Tesla is undoubtedly king. In 2021, its total deliveries of 936,222 vehicles represented an increase of 87% year on year (YoY) and cemented Tesla’s position as the top EV seller in the world.
Unlike traditional automakers, who – under pressure to deliver consistent profits - have been slow at making inroads in the EV market, Tesla made it their sole aim to bring electric vehicles to the mass-market and have invested heavily to achieve this.
This high level of investment is key to Tesla’s success. It meant that Tesla investors had to wait more than a decade after Tesla’s IPO for a profitable year, but we are now seeing the benefit of this investment in the scaling up of Tesla’s production.
Looking forward, CEO Elon Musk said recently that he wants Tesla to sell 20 million electric vehicles in 2030. This is certainly an ambitious target for the young company and the only way of achieving this figure would be through even higher levels of investment in the future.
Tesla’s success in the EV market has translated to phenomenal success in the stock market. In the five years ending 31 August 2022, Tesla’s share price gained more than 1,060% and herein may lie a problem for those considering investing in this electric vehicle stock – the share price.
Tesla’s expected future success has led to lofty valuations, which may deter some investors. At the time of writing (21 September 2022) its market capitalisation is $960 billion – which is almost double the combined market capitalisation of the next five largest automobile makers.
NIO
The problem with many EV stocks is the low level of vehicle deliveries, with many companies yet to produce or deliver an electric vehicle. Therefore, it might be argued that, the best electric vehicle stocks are the ones which are already producing and selling EVs.
Tesla is one of the few electric vehicle manufacturers delivering a meaningful number of vehicles. NIO’s delivery figures are much lower, and it appears to have been more affected by supply chain issues than Tesla; nevertheless, although delivery numbers are comparatively low, they are growing.
In 2021, total deliveries hit 91,429 – an increase of 109.1% year on year. More recently, in Q2 2022, the Chinese EV stock delivered 25,059 vehicles – an increase of 14.4% year on year. However, NIO’s lack of profitability appears to have significantly hampered its performance in the stock market.
In the current economic climate investors are prioritising profitable companies which have strong balance sheets. This has been reflected in NIO’s share price, which dropped 38% in the first eight months of 2022, representing a fall of 68% from its high in February 2021.
This steep decline may also be indicative of uncertainty surrounding Chinese stocks in the face of worsening US-China relations and increased regulatory scrutiny from Beijing.
However, despite the uncertainty and lack of profit, the fact that NIO are actually making deliveries and generating a reasonable amount of revenue ($1.5 billion in Q2 2022) puts it at an advantage over many of its competitors.
Yet, whilst NIO may be successful in the future, this does not change the fact that most investors are looking for profits now and NIO remains a speculative investment. Therefore, anybody considering investing in this EV stock should be prepared for ongoing share price volatility.
How to Invest in EV Stocks in 5 Steps
With an Invest.MT5 account from Admirals, you can buy shares in both EV stocks highlighted in the article. In order to start buying electric vehicle stocks, follow these 5 steps:
- Open an Invest.MT5 account with Admirals and log in to the Dashboard
- Find your account in the Dashboard and click ‘Invest’ to open the MetaTrader Web Trading Platform
- Search for your favourite EV stock in the Market Watch on the left of the screen
- Click and drag the symbol for the electric vehicle stock you want to invest in on to the chart window
- Click the New Order button at the top of the screen, enter the number of shares you want to buy and send the order to the market to complete the transaction!
Investing with Admirals
An Invest.MT5 account allows you to invest in over 2,500 stocks and more than 300 Exchange-Traded Funds (ETFs). Click the banner below to open an account with a minimum deposit of just €1.
About Admirals
Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the website of Admirals (hereinafter “Admirals”). Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
