Investors curious to know which electric vehicle stocks to buy have an increasing number of options to choose from.
Markets have certainly warmed up to the idea of electric vehicles, which was not the case several years ago. There are now many companies which are beginning to make waves in this space. Returns could be strong for many years as more and more consumers ditch ICE vehicles (those with internal combustion engines), and as EVs prove their worth.
A few stocks of EV companies which are each doing very different things within the industry. This industry is all about potential and revolution. Fundamental strength will come later for these picks.
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So, bearing that in mind, here are three electric vehicle stocks to buy that should appreciate, given their respective growth catalysts and not necessarily value.
Electric Vehicle Stocks to Buy: Workhorse (WKHS)
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Workhorse stock rose on news that it has signed a deal with Hitachi (OTC:HTHIY). The agreement means Hitachi will provide an assessment of Workhorse's manufacturing, supply chain and increased production requirements.
I wrote about the company in the past few weeks and I liked the company then. I thought it was a buy because its strategy is well thought out. The company is beginning to execute and there are a lot of ways for it to win.
And despite Workhorse's tiny sales numbers, it looks like it has what it takes to win. Prior to that, I was previously bearish on them exactly because of their valuation relative to their paltry sales.
The second time I looked into the stock, I realized that it is definitely in the right position.
The company looks like it is going to get at least some of the U.S. Postal Service fleet revamp contract. And perhaps this latest deal with Hitachi is actually the initial stages of such a deal. However, that's nothing more than mere speculation on my part. Further, the press release does mention that this deal is related to C-Series van financing and mentions nothing of the Postal Service bid.
All of this news, in tandem with the drone/van delivery combo, makes WKHS one of the best electric vehicle stocks to buy.
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A lot has been written about Tesla. And TSLA stock is overvalued. In a lot of ways markets could point to it and say that it exemplifies all that is wrong with today's stock market. Certainly, if Benjamin Graham were alive today, it'd be a stretch to imagine him investing in Tesla shares.
But that's not the point. Tesla is the granddaddy of EV stocks.
Its recent 5-for-1 forward stock split theoretically makes shares more accessible. In the upside-down stock market that investors currently live, this is a good thing. The inherent value of Tesla is unchanged. But investor psychology should be affected positively in the longer term.
True, Tesla shares are currently around $370, after dropping from $446 at the split. And maybe the markets are entering a period where investors calmly, rationally cool off the tech bubble EV valuations.
However, the more likely scenario is that shares remain high-priced and Tesla continues to release models and do new things in vehicles that fundamentally change cars. That should start to bring more and more real value to the shares, and they'll increase in a more organic fashion.
General Motors (GM)
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General Motors is an EV play to consider. Not because of the Bolt or the Volt, or any other electric vehicle they may be developing. But rather because of a fundamental change they may take in regard to their stock and how it is organized.
Currently, ICE vehicles and EVs play in the same sandbox at GM. Each contributes to the stocks underlying value. And that's quickly becoming something that may not make sense.
One of the prime reasons Tesla stock is so high-priced while Ford (NYSE:F) is not, is simple: EVs. The market believes EVs are the future, while ICE vehicles are not.
In a recent article on detroitnews.com GM CEO Mary Barra remained tight-lipped on the matter, stating:
"We are evaluating and always evaluate many different scenarios, so I don't have anything further to say other than we are open to looking at and evaluate anything that we think is going to drive long-term shareholder value. So I would say nothing is off the table."
GM is currently building a battery cell complex in tandem with LG Chem (USOTC:LGCLF) in Ohio. Valuations put the Ultium battery complex around $20 billion which, if spun off into a stock paired with GM vehicles, could draw in lots of capital in an IPO.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
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