Electric vehicle (EV) stocks could be in a prime position to deliver strong gains for investors as the broader indices like the S&P 500 and the Nasdaq take off as part of a bull market. I believe that EV stocks can stand to benefit more than companies in other industries — such as tech companies — whose valuations may be stretched too far for the comfort of many investors.
Despite the cyclical ups and downs of the market, EV brands have solid growth prospects ahead of them, making them suitable investments in their own right. Considering this, here are three EV stocks for investors to consider buying:
Tesla (TSLA)
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Tesla (NASDAQ:TSLA) continues to dominate the EV market with a substantial market value, showcasing its capability to produce vehicles at scale, leading to reduced prices and a broader market capture.
TSLA is projected to deliver roughly 2.25 million vehicles in 2024, with Morgan Stanley’s Adam Jonas highlighting Tesla’s potential to expand its dominance outside of China. These deliveries are also backed by an expanding product line that could complement its efforts, including ramping up production of the Cybertruck and introducing updated versions of the Model 3 and Model Y, including a new Model Y expected to begin manufacturing as early as mid-2024.
Although the consensus on Wall Street is that TSLA is a “Hold,” with its stock price predicted to rise 17.89% within the next twelve months and its EPS also predicted to surge 31.39% next year to $4.96, I believe that TSLA is one of those EV stocks that could benefit substantially from the ongoing bull market, and we could see it meeting analyst expectations.
General Motors (GM)
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General Motors (NYSE:GM) has made significant strides in the EV sector despite facing setbacks such as the withdrawal of a $5 billion EV development plan with Honda.
GM, to me, is perhaps one of the more underappreciated picks for investors who are looking to invest in EV stocks. The brand is steadfastly committed to transitioning its vehicles to electric. CEO Mary Barra underlines this commitment to eliminating tailpipe emissions from light-duty vehicles by 2035. It also recently announced the reintroduction of plug-in hybrid options alongside its all-electric vehicle efforts, which is seen as a temporary measure to bridge the gap as the national charging infrastructure continues to develop.
Despite falling 7.16% in the past year and Wall Street’s consensus price target for GM that implies a 30.22% upside, there’s substantial room for its shares to appreciate in value. This undervaluation is punctuated by its low valuation ratios, trading at just 5x earnings and 0.2x times sales.
Ford Motor (F)
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Ford Motor (NYSE:F) is making a strong pivot towards sustainable transportation through the electrification of its vehicles.
Ford has recently announced the introduction of seven new all-electric vehicles in Europe by 2024, including both passenger and commercial vehicles. Another bonus for investors is that Ford pays a great dividend yield of 4.68% and Wall Street expects its share price will increase 8.03% within the next twelve months.
This then makes Ford one of those EV stocks to consider as the bull market heats up.