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But why are electric cars such big news at the moment and which EV stocks are attracting investor attention? To find out, let’s take a closer look at what the future may hold for the EV industry, plus six of the best electric vehicle stocks to watch.
There’s no better place to start than with the best-known name in the EV game, Tesla. Based in Palo Alto, California, this EV manufacturer was founded in 2003 by a couple of engineers. One of its earliest employees was Elon Musk, who is now the company’s CEO and also the founder of aerospace company SpaceX.
Tesla has been one of the driving forces behind the growth of electric cars, and boasts an 18% market share of the global electric car market. It’s also one of the most visible of all EV brands — there’s a good chance you’ve seen one or more Teslas on the road at some point.
Tesla’s range of electric vehicles includes four models — Model S , Model 3, Model X and Model Y — plus a Cybertruck scheduled to enter production in late 2021. However, it does look set to face increasing competition from other manufacturers in the coming years.
A Chinese EV manufacturer based in Shanghai, Nio is often listed as one of Tesla’s main rivals. Founded in 2014 by entrepreneur William Li, it’s one of several Chinese startups with plans to steal some of Tesla’s market share in the coming years.
Nio’s range of premium electric vehicles includes the EC6 and ES6 mid-size SUVs, and the flagship ES8. The company also competes in the Formula E racing series, and its models slated for future production include a sedan, a minivan and another SUV.
This Chinese manufacturer has generated plenty of headlines in 2020, much of them to do with the fact that it secured US$1 billion of government funding in April.
Hyliion Holdings Corp is a Texas-based startup that, according to its promotional material, is focused on developing electrified powertrain solutions for the commercial transportation market. In other words, it’s an electric truck company.
Founded in 2015 by entrepreneur Thomas Healy, Hyliion gets its name from “Hybrid-Lithium-Ion”. It went public earlier in 2020 after merging with a special purpose acquisition company, and has made headlines for its fluctuating share price throughout the year.
Hyliion already sells a hybrid drive train that can be fitted to existing trucks, while its Hypertruck ERX uses a generator fueled by natural gas to charge the batteries for its electric motor.
Next on our list of EV stocks to watch is Workhorse Group, another US startup focused on commercial electric vehicles. Based in Cincinnati, Ohio, and established in 2007, the company started out electrifying two-seat roadsters.
These days, its focus is on electric delivery vehicles, with its fully electric C-Series vans powered by a modular battery pack system. It also offers a proprietary fleet tracking system and a delivery drone, the HorseFly, which is designed to work in tandem with its delivery vans.
Workhorse also has a stake in Lordstown Motors Corporation, which manufactures electric pickup trucks.
US company Fisker can trace its roots back to the noughties and once produced a hybrid electric vehicle known as the Karma. Fisker Automotive eventually went bankrupt, was acquired by China’s Wanxiang Group and renamed Karma Automotive, but original founder Henrik Fisker launched a new company, Fisker Inc., in 2016.
Based in California, Fisker Inc. is planning to start production on its Ocean electric SUV in 2021. The Ocean is expected to have a range of over 400km and be priced at US$37,499.
Kandi Technologies Group is a Chinese manufacturer of batteries and electric vehicles. Headquartered in Jinhua in eastern China, the company also has a US subsidiary based in Garland, Texas.
Kandi’s first two models are the K23 and the compact K27, and both are priced at the more affordable end of the EV spectrum. At the time of writing, it had also recently been announced that both models would qualify for a US$2,500 rebate for Texas buyers of cars powered by renewable energy.
There are a few important reasons why EV stocks are gaining plenty of attention from investors around the world at the moment.
An alternative way to gain exposure to the EV industry is to invest in an exchange-traded fund. ETFs can be traded on stock exchanges in the same way you buy and sell stocks, and they’re essentially investment funds that consist of a basket of stocks. The advantage of ETFs is that they allow you to invest in a particular sector without putting all your eggs in one basket and backing a single company to succeed.
By investing in an ETF that focuses on the EV market or associated technologies, you can gain exposure to multiple companies that could potentially benefit from rising sales of electric cars. One example of an EV ETF is the ETFS Battery Tech & Lithium ETF (ACDC), which focuses on energy storage and production companies.
That’s the big question — and given the rising popularity of electric vehicle stocks, it seems that plenty of investors are gambling that the answer will be yes.
As things stand, it certainly appears that the EV industry is a sector with plenty of growth potential. EV companies are performing well, traditional auto-manufacturers are getting into the EV market, and global events are driving up the alternative (through rising costs of oil). However, whether the uptake of electric vehicles occurs as quickly as some people are predicting remains to be seen. The world of electric vehicles is also an increasingly competitive space, so determining which companies are best placed to take advantage of future growth requires through evaluation.
And as always, just like any other investment, buying EV stocks comes with a level of risk attached. It’s up to you to research the EV industry and individual stocks before deciding whether they’re worthy of any of your investment dollars.
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