3 EV Stocks to Buy Now: Q2 Edition

Mohammed Saqib

Sun, Apr 21, 2024, 10:00 AM 4 min read

BYD

Close-up of BYD (BYDDY) logo on red car, symbolizing BYDDY stock

Source: shutterstock.com/Trygve Finkelsen

BYD (OTCMKTS:BYDDY) stands as a leading force in the electric vehicle industry. BYD’s unique position as both a vehicle manufacturer and a battery technology supplier provides a competitive edge.

The company’s strategic market expansion is evident in its operations across continents. In Europe, BYD has established production facilities that cater to an increasing demand for EVs, while in Southeast Asia and South America, the company is capitalizing on emerging market opportunities.

In the fiscal year 2023, BYD reported a remarkable 42% increase in revenues, reflecting robust demand for its EVs and battery products. The company’s aggressive expansion has not compromised its profitability, with earnings per share rising by over 70% from the previous year. This financial health is pivotal as BYD continues to invest heavily in research and development and expand its global footprint.

Last year, BYD achieved a significant milestone by selling more than 1.5 million EVs, capturing a substantial share of the Chinese market, which is the largest EV market globally.

Li Auto

Source: Robert Way / Shutterstock.com

Li Auto (NASDAQ:LI) specializes in producing smart, electric SUVs with a focus on range extension technology. The EV maker’s approach, particularly with the range extender, sets it apart in a market leaning towards fully electric powertrains. This strategy appeals especially to consumers who may have concerns about electric charging infrastructure and range limits.

In the fiscal year 2023, Li Auto reported impressive results that underscored its growth trajectory and market acceptance. The company’s delivery figures were also remarkable, with 376K vehicles delivered in 2023, representing a year-over-year increase of 182.2%. Li Auto’s ability to maintain lower estimated average selling prices while expanding margins is a testament to its operational efficiency and strategic pricing.

The company’s stock has done well over the past year. However, analysts are still bullish and have an average price target of $51 on the stock. This presents a potential 75% upside in the near-term.

Rivian

Despite a sharp decline in stock price, Rivian (NASDAQ:RIVN) presents a compelling case for investors seeking long-term EV opportunities. Rivian’s unique market position as a producer of adventure-oriented EVs, such as the R1T pickup truck, sets it apart from competitors.

Despite the operational challenges, Rivian maintains a robust financial position, with over $7 billion in cash reserves. This liquidity is crucial to supporting the company through its restructuring phase and towards achieving gross margin profitability by the end of 2024.

Looking ahead, Rivian is focusing on expanding its product lineup and improving operational efficiency. The introduction of new models, such as the anticipated R2, is expected to broaden Rivian’s market appeal and drive future sales. Furthermore, Rivian’s ongoing efforts to enhance production efficiency and reduce costs are pivotal to its strategy to achieve and sustain profitability.

Wall Street analysts remain bullish on the stock and have an average price target of $17.5 on the stock. This provides a near-term potential upside of 98%.

On the date of publication, Mohammed Saqib did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Mohammed Saqib is a research analyst with experience in equity research and financial modeling. He has extensively covered stocks listed in the tech sector using fundamental analysis as the cornerstone of his approach. Currently pursuing a master’s degree in finance, Saqib is dedicated to obtaining the CFA charter to augment his expertise in the field further.