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13 Most Promising EV Stocks According To Hedge Funds

Ramish Cheema
8 min read

In This Article:

In this piece, we will take a look at the 13 most promising EV stocks according to hedge funds. If you want to skip our overview of the electric vehicle industry, then you can take a look at the 5 Most Promising EV Stocks According To Hedge Funds.

The 21st century has bred several new industries that have reshaped our way of life. Courtesy of advances in computing and the Internet, communications, entertainment, and work are significantly different in 2023 when compared to just two decades back. Similarly, mass production and industrial engineering coupled with the prowess of Tesla, Inc. (NASDAQ:TSLA) has also made electric vehicles quite common.

In fact, Tesla's success and the resulting market saturation through products offered by both traditional car manufacturers such as Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) and new electric vehicle companies such as Li Auto Inc. (NASDAQ:LI) and NIO Inc. (NYSE:NIO) to introduce countless new EVs in the market. This has led to the market blossoming, with data from the International Energy Agency (IEA) showing that 2022 was another record year for the EV industry. This is despite the fact that EV stocks, which are high growth and high risk due to less established manufacturing capacity and less market share, were pummeled as investors fled to safety in a high rate environment and consumers felt the inflationary pinch.

Just how record setting was 2022? Well, according to the IEA EV sales grew by 55% in 2022 at a time when the broader automotive industry contracted by 3%. In total, ten million electric cars were sold globally in 2022 - a figure that led to 26 million cars roaming the roads for a 60% annual jump. Within this growth, the most popular electric vehicles were battery EVs, which are those that solely rely on their batteries to power up the car. BEVs accounted for 70% of all the EVs on the road, and the growth was in line with the average historical growth. This is a crucial insight since it shows that the considerable global demand for electric vehicles was sufficiently robust to ensure a quick recovery after the devastation ushered in by the coronavirus pandemic.

This robust demand also means that the EV sector is estimated to be one of the fastest growing industries that you're likely to come across. For instance, research shows that the EV market was worth $163 billion in 2020 and is expected to grow at a compounded annual growth rate (CAGR) of 18.2% to be worth $823 billion by 2030 end. A double digit growth rate is anything that anyone can hope for really, but a key caveat for the EV industry is that even though millions of vehicles are on the roads, there is inadequate charging infrastructure to ensure long trips. Conventional cars have had decades for companies such as TotalEnergies SE (NYSE:TTE) to set up gasoline pumps in nearly every area imaginable. However, the charging infrastructure industry is quite nascent but it is going through some developments that could overcome these constraints.

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